1980-12-17 Regular Meeting - Laserfiche WebLink

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e e e "THE TAX RELIEF AMENDMENT" To the Constitution of the State of Texas The electorate of the State of Texas approved at a general election held on November 7, 1978 "The Tax Relief Amendment. " This amendment was proposed by the 65th Legislature of the State of Texas when it adopted H.J .R. 1 in its second called session. "The Tax Relief Amendment" amends Article VIII of the Texas Constitu- tion. The following briefly describes those provisions in "The Tax Relief Amendment" applicable to the City: 1.) Removes intangible personal property from the constitutionally required tax base, but allows the Legislature to provide by statute for the taxation of such property. 2.) Exempts from taxation household goods and personal effects not held or used for the production of income and authorizes the Legislature to exempt all or part of that personal property which is immune from forced sale for debt. 3.) Requires that taxation of open-space land devoted to farm or ranch purposes be on the basis of its productive capacity and grants the Legislature the authority to provide by general law for taxation of open-space land devoted to timber production on the basis of its productive capacity. Grants the Legislature the authority to provide by general law for eligibility limi- tations under this section and to impose sanctions in furtherance of the taxation policy of this section. 4.) Authorizes an exemption from ad valorem taxation of an amount of not less than $3,000 of the market value of residence homesteads for certain disabled citizens and persons 65 years of age or older. 5.) Exempts from coverage of the provisions of this amendment outlined in item 4.) above. the ad valorem tax previously pledged for the payment of debt if it would impair the obligation of the contract by which the debt was created. 6;) Requires all political subdivisions to conduct truth in taxation hearings; requires public notifi- cation when tax increases are contemplated; and, requires notice to individual taxpayers when property values are increased 7.) Provides for limiting the rate of growth in State spending to the reate of growth of the State's economy. 8.) Prohibits State-wide appraisal of real property for ad valorem tax purposes and requires ad- . ministrative and judicial enforcement of uniform standards and procedures for appraisal of property on the county level. The 66th Legislature of the State of Texas adopted House Bill 1060 on May 28, 1979 which implements the provi- sions of "The Tax Relief Amendment" as outlined above. The City's January 1. 1980 total consolidated assessed valuation is $366.726,568 after granting $5,206,170 of exemptions, including the homestead exemptions. as provid- ed for in "The Tax Relief Amendment." The City's Tax Assessor-Collector advises that im'plementation of the agriculture and teimber use valuations will have no impact on the City's total assessed valuation. House Bill 18, "Truth in Taxation." was also enacted by the 66th Legislature and became effective January 1. 1979. The statute requires notice to be given and public hearings to be held prior to the adoption of a tax rate which is more than 3% greater than an "effective Rate' Calculated purusant to the Statute. Under the provisions of the statute. the tax rate necessary to pay debt service on bonds is a component of the "effective rate" calculated pursuant to the statute and, therefore. will not result in a tax rate greater than said "effective rate. " The statute also requires the Tax Assessor-Collector to give written notice to each property owner whose property value has been increased by more than $100 above its value in the preceding year. Among other mat- ters. such notice must include a statement of the amount of taxes that will be imposed on the basis of new value if neither the tax rate nor the ratio of assessment in effect for the preceding year is reduced. Senate Bill 621. "Property Tax Code." was also enacted by the 66th Legislature of the State of Texas. and signed into law by the Governor on June 13. 1979. and is applicable to all taxing umts in the State. including the City of La Porte. The "Property Tax Code." generally effective January 1. 1982, will require. among other things. that a single central appraisal board within each county appraise all taxable property for purposes of ad valorem tax assessments by all taxing units except the county itself. The City's ad valorem tax. which is pledged to the payment of the Certificates, is currently imposed at a rate determined by the members of the City Council based on the assessed valuation of property in the City as initially established by the City's Tax Assessor and approved or modified by the Board of Equalization. The appraisal district (and an appraisal review board) has the responsibility for establishing the tax roUs for politi- cal subdivisions within the county, with: certain exceptions (not including the City.) Those roUs must be used by the City in establishing its tax rate. The Code requires an update of appraised values not less frequently than every five years. and the City has the right to obtain more frequent appraisals. at its expense. Effec- tive January 1. 1982. the Code will prohibit the City from increasing its tax rate (exclusive of increases for debt service) without a prior public hearing and gives the voters of the City the right of referendum to repeal any such increases in excess of 5\ per annum. e The City's Tax Assessor-Collector cannot predict the precise effect that the enactment of the "Property Tax Code" wiD have on the City's ability to assess and collect ad valorem taxes, but does not believe the effect will be materially adverse. -2-