CAI(LEGAL) - APPROPRIATIONS AND REVENUE SOURCES: AD VALOREM TAXES

Tax Bonds and Maintenance Tax

The governing board of each junior college district shall be authorized to issue negotiable coupon bonds for the construction and equipment of school buildings and the purchase of the necessary sites therefor, and levy and pledge annual ad valorem taxes sufficient to pay the principal of and interest on said bonds as they come due, and levy annual ad valorem taxes for the further maintenance of its public junior college or junior colleges; provided that the annual bond tax shall never exceed $.50 on the $100 valuation of taxable property in the district, and the annual bond tax, if any, together with the annual maintenance tax shall never exceed the aggregate of $1 on the $100 valuation of taxable property in the district. [See CAD] Education Code 130.122(a)

Notice

By August 7 or as soon thereafter as practicable, the designated officer or employee shall submit the no-new-revenue tax rate and the voter-approval tax rate in accordance with Tax Code 26.04 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 obligations; and
  3. A schedule of the taxing unit's debt obligations as prescribed by Tax Code 26.04(e)(3).

Tax Code 26.04(e)

Tax Rate

The governing body of each taxing unit shall adopt a tax rate for the current tax year and shall notify the assessor for the taxing unit of the rate adopted. The governing body must adopt a tax rate before the later of September 30 or the 60th day after the date the certified appraisal roll is received by the taxing unit, except that the governing body must adopt a tax rate that exceeds the voter-approval tax rate not later than the 71st day before the next uniform election date prescribed by Election Code 41.001 that occurs in November of that year. 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 described by Tax Code 26.04(e)(3)(c), 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 taxing unit for the next year.

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 shall 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.

Tax Code 26.05(a)–(b)

No-New-Revenue Tax Rate

The vote on the ordinance, resolution, or order setting a tax rate that exceeds the no-new-revenue tax rate must be a record vote, and at least 60 percent of the members of the governing body must vote in favor of the ordinance, resolution, or order. A motion to adopt an ordinance, resolution, or order setting a tax rate that exceeds the no-new-revenue tax rate must be made in the following form: "I move that the property tax rate be increased by the adoption of a tax rate of (specify tax rate), which is effectively a (insert percentage by which the proposed tax rate exceeds the no-new-revenue tax rate) percent increase in the tax rate." Tax Code 26.05(b)

Maintenance and Operations 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 include in the ordinance, resolution, or order in type larger than the type used in any other portion of the document the following statement: "THIS TAX RATE WILL RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR'S TAX RATE."; and if the tax rate exceeds the no-new-revenue maintenance and operations rate, the following statement: "THE TAX RATE WILL EFFECTIVELY BE RAISED BY (INSERT PERCENTAGE BY WHICH THE TAX RATE EXCEEDS THE NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE) PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $(Insert amount)." Tax Code 26.05(b)

Internet Posting

The taxing unit must include on the home page of the internet website of the taxing unit 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 if the tax rate exceeds the no-new-revenue maintenance and operations rate, the following statement: "THE TAX RATE WILL EFFECTIVELY BE RAISED BY (INSERT PERCENTAGE BY WHICH THE TAX RATE EXCEEDS THE NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE) PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $(Insert amount)." Tax Code 26.05(b)

Tax Rate Exceeding the Voter-Approval or No-New-Revenue Tax Rate

The governing body of a taxing unit other than a school district may not adopt a tax rate that exceeds the lower of the voter-approval tax rate or the no-new-revenue tax rate calculated as provided by Tax Code Chapter 26 until the governing body has held a public hearing on the proposed tax rate and has otherwise complied with Tax Code 26.06 and 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 voter-approval tax rate or the no-new-revenue tax rate and may not adopt a higher rate unless it first complies with Tax Code 26.06.

The governing body of a taxing unit other than a school district may not hold a public hearing on a proposed tax rate or a public meeting to adopt a tax rate until the fifth day after the date the chief appraiser of each appraisal district in which the taxing unit participates has delivered the notice required by Tax Code 26.04(e-2) and complied with Tax Code 26.17(f).

Notwithstanding Tax Code 26.05(a), the governing body of a taxing unit other than a school district may not adopt a tax rate until the chief appraiser of each appraisal district in which the taxing unit participates has complied with Tax Code 26.05(d-1).

Tax Code 26.05(d)-(d-2)

Public Hearing

The public hearing required above may not be held before the fifth day after the notice of the public hearing 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.

The notice of a public hearing shall be in the size and form prescribed by Tax Code 26.06(b)-(b-4). In addition, the notice must include at the end of the notice the information prescribed by Tax Code 26.062. The notice of a public hearing may be delivered by mail to each property owner in the taxing unit, or 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 publishes the notice in a newspaper, the taxing unit must also post the notice prominently on the home page of the internet website of the taxing unit from the date the notice is first published until the second public hearing is concluded.

The governing body may vote on the proposed tax rate at the public hearing. If the governing body does not vote on the proposed tax rate at the public hearing, the governing body shall announce at the public hearing the date, time, and place of the meeting at which it will vote on the proposed tax rate.

Tax Code 26.06(a)–(d), .062

Adoption of Tax Rate After Hearing

A meeting to vote on the tax increase may not be held later than the seventh day after the date of the 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. Tax Code 26.06(e)

Supplemental Notice

In addition to the notice required under Tax Code 26.06, the governing body of a taxing unit required to hold a public hearing by Tax Code 26.05(d) shall give notice of the hearing in the manner provided by this section.

The taxing unit shall post notice of the public hearing prominently on the home page of the internet website of the taxing unit continuously for at least seven days immediately before the public hearing on the proposed tax rate increase and at least seven days immediately before the date of the vote proposing the increase in the tax rate.

If the taxing unit has free access to a television channel, the taxing unit shall request that the station carry a 60-second notice of the public hearing at least five times a day between the hours of 7:00 a.m. and 9:00 p.m. for at least seven days immediately before the public hearing on the proposed tax rate increase and at least seven days immediately before the date of the vote proposing the increase in the tax rate.

The notice of the public hearing required by Tax Code 26.065(b) must contain a statement that is substantially the same as the statement required by Tax Code 26.06(b).

This section does not apply to a taxing unit if the taxing unit:

  1. Is unable to comply with the requirements of this section because of the failure of an electronic or mechanical device, including a computer or server; or
  2. Is unable to comply with the requirements of this section due to other circumstances beyond its control.

A person who owns taxable property is not entitled to an injunction restraining the collection of taxes by the taxing unit in which the property is taxable if the taxing unit has, in good faith, attempted to comply with the requirements of this section.

Tax Code 26.065

Tax Rate Below the Voter-Approval or No-New-Revenue Tax Rate

This section applies only to the governing body of a taxing unit other than a school district that proposes to adopt a tax rate that does not exceed the lower of the no-new-revenue tax rate or the voter-approval tax rate calculated as provided by Tax Code Chapter 26.

The notice of the meeting at which the governing body of the taxing unit will vote on the proposed tax rate must contain a statement in the form prescribed by Tax Code 26.061(b). In addition to including the information described by Tax Code 26.061(b), the notice must include the information described by Tax Code 26.062.

The notice required under this section must be provided in the manner required under Tax Code 26.06(c).

Tax Code 26.061

Failure to Timely Adopt a Tax Rate

If the governing body of a taxing unit does not adopt a tax rate before the date required by Tax Code 26.05(a), the tax rate for the taxing unit for that tax year is the lower of the no-new-revenue tax rate calculated for that tax year or the tax rate adopted by the taxing unit for the preceding tax year. A tax rate established by this provision is treated as an adopted tax rate. Before the fifth day after the establishment of a tax rate by this provision, the governing body of the taxing unit must ratify the applicable tax rate in the manner required by Tax Code 26.05(b). Tax Code 26.05(c)

Election to Repeal Increase

If the governing body of a special taxing unit, including a community college, adopts a tax rate that exceeds the taxing unit's voter-approval tax rate, the registered voters of the taxing unit at an election held for that purpose must determine whether to approve the adopted tax rate. When increased expenditure of money by a taxing unit is necessary to respond to a disaster, including a tornado, hurricane, flood, wildfire, or other calamity, but not including a drought, that has impacted the taxing unit and the governor has declared any part of the area in which the taxing unit is located as a disaster area, an election is not required under this section to approve the tax rate adopted by the governing body for the year following the year in which the disaster occurs.

The governing body shall order that the election be held in the taxing unit on the uniform election date prescribed by Election Code 41.001 that occurs in November of the applicable tax year. The order calling the election may not be issued later than the 71st day before the date of the election. At the election, the ballots shall be prepared to permit voting for or against the proposition: "Approving the ad valorem tax rate of $_____ per $100 valuation in (name of taxing unit) for the current year, a rate that is $_____ higher per $100 valuation than the voter-approval tax rate of (name of taxing unit), for the purpose of (description of purpose of increase). Last year, the ad valorem tax rate in (name of taxing unit) was $__________ per $100 valuation." The ballot proposition must include the adopted tax rate, the difference between the adopted tax rate and the voter-approval tax rate, and the taxing unit's tax rate for the preceding tax year in the appropriate places.

If a majority of the votes cast in the election favor the proposition, the tax rate for the current year is the rate that was adopted by the governing body. If the proposition is not approved, the taxing unit's tax rate for the current tax year is the taxing unit's voter-approval tax rate.

Tax Code 26.07(b)–(e)

Call for Election

An election ordered by an authority of a political subdivision shall be ordered not later than the 62nd day before election day. Election Code 3.005(a)

Exception

For an election to be held on a uniform election date, the election shall be ordered not later than the 78th day before election day. [See BBB] Election Code 3.003, .005(c), 41.002

Notice to County Clerk and Voter Registrar

The governing body of a political subdivision, including a college district, shall deliver notice of the election to the county clerk and voter registrar of each county in which the political subdivision is located not later than the 60th day before election day. Election Code 4.008(a)

Proposition

In addition to any other requirement imposed by law for a proposition, including a provision prescribing the proposition language [see BBB], a proposition submitted to the voters for approval of the reduction of a tax shall specifically state the amount of tax rate reduction or the tax rate for which approval is sought. Election Code 52.072(e)

Dissemination of Tax Information

Posting of Information Online

Each taxing unit shall maintain an internet website or have access to a generally accessible internet website that may be used for the purposes of this section. Each taxing unit shall post or cause to be posted on the internet website the following information in a format prescribed by the comptroller:

  1. The name of each member of the governing body of the taxing unit;
  2. The mailing address, email address, and telephone number of the taxing unit;
  3. The official contact information for each member of the governing body of the taxing unit, if that information is different from the information described by item 2;
  4. The taxing unit's budget for the preceding two years;
  5. The taxing unit's proposed or adopted budget for the current year;
  6. The change in the amount of the taxing unit's budget from the preceding year to the current year, by dollar amount and percentage;
  7. In the case of a taxing unit other than a school district, the amount of property tax revenue budgeted for maintenance and operations for the preceding two years and the current year;
  8. In the case of a taxing unit other than a school district, the amount of property tax revenue budgeted for debt service for the preceding two years and the current year;
  9. The tax rate for maintenance and operations adopted by the taxing unit for the preceding two years;
  10. In the case of a taxing unit other than a school district, the tax rate for debt service adopted by the taxing unit for the preceding two years;
  11. The tax rate for maintenance and operations proposed by the taxing unit for the current year;
  12. In the case of a taxing unit other than a school district, the tax rate for debt service proposed by the taxing unit for the current year; and
  13. The most recent financial audit of the taxing unit.

Tax Code 26.18

Tax Information to County

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: the adopted tax rate, the maintenance and operations rate, the debt rate, the no-new-revenue tax rate, the no-new-revenue maintenance and operations rate, and the voter-approval tax rate.

A taxing unit all or part of the territory of which is located in a county shall provide the information described above pertaining to the taxing unit to the county assessor-collector annually following the adoption of a tax rate by the taxing unit for the current tax year.

Tax Code 26.16(a)–(b)

Property Tax Database

In accordance with Tax Code 26.17, the chief appraiser of each appraisal district shall create and maintain a property tax database.

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 for the taxing unit must electronically incorporate into the database:

  1. The information described by Tax Code 26.17(b)(5), (6), (7), (12), and (13), as applicable, as the information becomes available; and
  2. The tax rate calculation forms prepared under Tax Code 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 Tax Code 26.04(e).

Tax Code 26.17(a), (e)

Branch Campus Maintenance Tax

In accordance with Education Code 130.253, the governing body of a school district or a county may levy a junior college district branch campus maintenance tax at a rate not to exceed five cents on each $100 valuation of all taxable property in its jurisdiction.

The proceeds of the junior college district branch campus maintenance tax may be used only as follows:

  1. To operate and maintain a branch campus and support its programs and services in the area of the political subdivision that levied the tax; and
  2. Under an agreement by the applicable junior college district and the political subdivision levying the tax, to make lease payments to the political subdivision for facilities used exclusively by the branch campus that are owned by the political subdivision.

Education Code 130.253(a), (k)

Local Steering Committee

A local group of citizens interested in establishing a branch campus maintenance tax jurisdiction shall appoint a steering committee of at least seven citizens to provide leadership on behalf of the tax effort. The steering committee shall be composed of a cross-section of the population of the area, with representation from major civic groups and business and industry. A chair, co-chair, and secretary shall be appointed, along with any other officers who may be of assistance to the committee. Where the proposed branch campus maintenance tax jurisdiction is to be located in an independent school district, the district board of trustees may serve as the steering committee.

The steering committee shall:

  1. Serve as liaison between the local community, the college district which would operate the branch campus, and the Coordinating Board;
  2. Be responsible for conducting a feasibility study and a survey of the needs and potential of the area for a branch campus;
  3. Provide information to the community, which at a minimum, describes the nature and purpose of a branch campus;
  4. Summarize and evaluate the results of the feasibility study and survey and formulate conclusions for submission to the commissioner;
  5. Prepare and circulate a petition to obtain not fewer than five percent of the qualified voters of the proposed branch maintenance tax jurisdiction; and
  6. Present the appropriately signed petition as set out in 19 Administrative Code 8.30(a) to appropriate authorities for certification in compliance with Education Code 130.087.

19 TAC 8.93

Application Procedures

The steering committee and the community college district that is planning the branch campus shall jointly file a letter of intent with the commissioner as soon as practical. The staff of the Coordinating Board shall offer advice and technical assistance to the steering committee under the direction of the commissioner on procedures and requirements. 19 TAC 8.94

Local Feasibility Study and Survey

A local feasibility study consisting of a survey of need, potential student clientele, financial ability of the jurisdiction, and other pertinent data must be carried out under the auspices of the steering committee and the college which shall operate the branch campus. This feasibility study may be conducted either by the steering committee or by professionals.

The Coordinating Board staff shall offer advice and technical assistance to the steering committee under the direction of the commissioner. When the feasibility study is conducted by a professional individual or research organization, the steering committee shall fully advise the commissioner prior to initiating the study.

The feasibility study shall be made in consultation with the Coordinating Board staff and, upon completion, be submitted to the commissioner. The commissioner, in consultation with Coordinating Board staff, shall determine if further documentation or clarification is needed to supplement the information presented in the feasibility study.

The feasibility study shall be reviewed by the Coordinating Board, along with other information it deems appropriate, in determining whether the criteria as set out in 19 Administrative Code 8.89 (relating to Standards and Board Procedure for Approval) have been met.

19 TAC 8.95

Petition

In counties with a population of more than 150,000, the steering committee shall be responsible for the circulation of a petition for authorization of an election to levy a public community college branch campus maintenance tax. At a minimum, the petition shall include the maintenance tax limits that shall appear on the ballot in the event an election is authorized. For counties with a population of 150,000 or less or an independent school district within a county with a population of 150,000 or less, no petition to propose an election for a branch campus maintenance tax is required to be submitted to the Coordinating Board.

The petition must incorporate all requirements as set forth in Election Code Chapter 277. After the petition has been circulated among the electorate and has been signed by not less than five percent of the qualified electors of the proposed branch maintenance tax jurisdiction, the petition shall be presented to the appropriate authorities who have the duty of verifying the legality of the petition.

Upon submission of a petition for an election to authorize a branch campus maintenance tax to a governing body of an independent school district or county, the governing body may propose an election and submit to the commissioner a feasibility study and survey. Upon approval by the commissioner, the governing body may enter an order for an election.

The governing body of a county with a population of 150,000 or less or an independent school district within a county with a population of 150,000 or less, on completion and approval of the feasibility study and survey by the commissioner, on its own motion and without presentation and approval of a certified petition to the Coordinating Board may order an election to authorize a branch campus maintenance tax. The governing body of an independent school district or county, notwithstanding 19 Administrative Code 8.98(b), shall present a certified petition to the commissioner who shall then present it to the Coordinating Board for approval or disapproval.

After the petition and any additional documentation or information are presented to the commissioner, a minimum of 45 days must elapse between the date on which the petition and supporting documents are received by the commissioner and the quarterly meeting of the Coordinating Board when the Coordinating Board will consider the petition.

19 TAC 8.96–.98

Coordinating Board Approval

Education Code 130.253 requires the Coordinating Board to determine that:

  1. The branch campus maintenance tax rate does not exceed five cents on each $100 valuation of all taxable property;
  2. A certified petition has been submitted by the appropriate authorities to the Coordinating Board; and
  3. The proposed tax is feasible and desirable.

Education Code 130.253(c); 19 TAC 8.99(a)

Criteria

The Coordinating Board shall apply the following criteria when considering the appropriateness for the levying of a branch campus maintenance tax:

  1. Demographic and economic characteristics of the jurisdiction seeking to establish the maintenance tax, such as:
    1. Population trends by age group;
    2. Economic development trends and projection; and
    3. Employment trends and projection (i.e., supply-demand data).
  2. Potential student clientele, including:
    1. Educational levels by age group; and
    2. College-bound data (i.e., trends by age group).
  3. The financial status of the proposed jurisdiction to be taxed and the state as a whole, including:
    1. Any projected growth or decline in the tax base; and
    2. Trends in state appropriations for community/junior colleges and other institutions of higher education.
  4. Projected programs and services for the proposed jurisdiction based on economic and population trends.
  5. Proximity and impediments to programs and services to existing institutions of higher education such as:
    1. Identification of institutions that could be affected by a new branch campus;
    2. Documentation of existing programs and services:
      1. On the campuses of nearby institutions of higher education;
      2. Available to citizens within a 50-mile radius of the proposed jurisdiction; and
      3. Offered in the proposed jurisdiction by existing institutions of higher education.
    3. Financial limitations on existing institutions of higher education inhibiting the offering of programs and services in the proposed jurisdiction;
    4. Availability of facilities, libraries, and equipment for institutions to offer classes in the proposed jurisdiction;
    5. Distance and traffic patterns to existing institutions of higher education;
    6. Effect on enrollments of existing institutions of higher education; and
    7. Effect on financing of existing institutions of higher education.

Education Code 130.253(c); 19 TAC 8.99(b)

Public Hearings

A Coordinating Board committee may conduct one or more public hearings in the proposed jurisdiction to:

  1. Assess public sentiment regarding the levying of a branch campus maintenance tax;
  2. Determine whether programs in the proposed jurisdiction would create unnecessary duplication or seriously harm programs in existing community/junior college districts or other institutions of higher education in the area; and
  3. Assess the potential impact of the proposed jurisdiction on existing community/junior colleges or other institutions of higher education in the area and on the state of Texas.

Education Code 130.253(c); 19 TAC 8.99(c)

Recommendation

After the self-study has been reviewed and, if applicable, a site visit conducted by a Coordinating Board committee and Coordinating Board staff, a report from the Coordinating Board staff shall be submitted to the commissioner indicating whether the criteria as set out above have been met. The report shall include a recommendation for approval or denial of the request for approval to hold an election to levy a branch campus maintenance tax, but shall not be binding on the commissioner or the Coordinating Board.

Coordinating Board action on the request for approval to hold an election to levy a branch campus maintenance tax shall be taken at the next quarterly Coordinating Board meeting. In making its decision, the Coordinating Board shall consider the needs of the community/junior college, the needs of the community or communities served by the branch campus maintenance tax jurisdiction, and the welfare of the state as a whole. A resolution shall be entered in the minutes of the board and conveyed in writing by the commissioner to the governing board of the community/junior college district.

Education Code 130.253(c); 19 TAC 8.99(d), .100

Election

If the Coordinating Board approves the establishment of the branch campus maintenance tax, the governing body of the school district or county shall enter an order for an election to be held in the territory under its jurisdiction not less than 20 days nor more than 60 days after the date on which the order is entered to determine whether the branch campus maintenance tax may be levied. In the case of the joint school district or joint county elections, by mutual agreement of the governing bodies, the elections shall be held on the same date throughout the jurisdictions.

The president of the governing board of the school district or the county judge, as applicable, shall give notice of the election in the manner provided by law for notice by the county judge of general elections.

A majority of the electors in the proposed branch campus maintenance tax jurisdiction voting in the election shall determine the question of the creation of the branch campus maintenance tax jurisdiction submitted in the order.

19 TAC 8.101–.102

Resubmission of Applications

Should an election to create a branch campus maintenance tax jurisdiction fail, a period of 12 months must elapse before resubmission of the proposition to the Coordinating Board. The Coordinating Board shall require a strong showing of need and unusual circumstances before approving resubmission before the 12 months have elapsed. 19 TAC 8.103

Texarkana College

CAI(LEGAL)-LJC

UPDATE 38

DATE ISSUED: 5/22/2020