March2. 1987 **.lIYl MxrrGX**  **X,- ‘** **=GRSEY GESERAL** 

**5** Eonorable Bevil B.Wright

HardinCountyAttorney P. 0. Box516 Kountze
,Texas 77625 Opinion No. JM-641

Re: Whethera**county** tax rate increase to provide for indigent health care services is subject to a rollback election under section 26.07 of the TaxCode, andrelated questions

DearMs.Wright:
The Sixty-ninth Legislature enacted in special session **the** Indigent Health Care and Treatment Act [hereinafter the act], which requires govermaental entities toprovide certain health care services to Indigent rqsldents. Acts 1985, 69th Leg., 1st C.S., ch. 1, at 3777. Sections 2and3of Eheact amendedsections 26.04, 26.06, and

.26.07 of the Tax Code, which set forth the requirements for the effective ad valorem tax rate calculation, for the content of the notice of the public meetings held prior to the adoption of the tax rate, andfor the tax rate rollback petition andelection procedures, respectively, with which **taxing** units mustcomply. Youask us three questions regarding the effect of the act and its amendatory provisions.

Section 26.04 of the TaxCodesets forth themethodbywhich the so-called “effective tax’rate” is calculated byeach taxing unit prior to the adoption of its advalorem **tax** rate. The“effective tax rate” is that tax rate which, whenimposed uponthe property that wastaxed. last **year** but using this year’s appraised values, will produce approximately the amountof revenue that wasproduced last **year.** See Tex. Const. art. VIII, section 21; Attorney General Opinion MW-m (1982). Section 26.05 of theTaxCodeprovides that, if ataxing unit adopts a tax rate that exceeds the effective tax rate by more than three percent, the taxing unit must hold a public hearing on the proposed increase andpublish aspecified public notice of themeeting prior to Its being held. SeeTaxCode 126.06. Section 26.07 of the Tax Codepermits qualifiedxters of the taxing **unit** by petition to require that atax rate rollback election **be**held if the adopted rate exceeds the effective rate by more than eight percent. If the election is successful, the adopted rate is reduced to “a rate **that** exceeds the rate calculated by section 26.04 of this code by only eight percent.I’ TaxCode 526.07(a).

p. 2900Ronorable Bevil B.Wright - Page2 (JM-641)

The amendmentsto sections 26.04, 26.06, and 26.07 of the Tax Codecontained in the act effectively segregate out the amountof the tax rate increase attributable to **the** costs of providing in the first **year** the health services required by the act. Section 26.04(e) was amended**by** the act to include amongthe Items of information that the taxing unit is required to publicize in connection with the calculation of its effective tax rate

a schedule of the unit’s expenses in providing services required by the Indigent Health Care and Treatment Act

. . . showing the amountof required expense which will be paid in the next year from property tax revenues, the amount of required expense paid in the preceding year from property tax revenues, and the amounts of state reimbursement, if any, received or expected for either year.
TaxCode926.04(e) (4).

Section 26.06 was amendedby the addition of subsection (f). vhich lists the items of information that the published notices for the advalorem tax rate increase andfor the vote onthe adoption of the tax rate must contain for those taxing units that offer health services as required by the act. Eachnotice is required to specify explicitly the percentage of the tax rate increase which is attributable to the costs of providing the required indigent health care services. Eachsuch notice mustcontain the following:

(Percentage of increase over the tax rate required to levy amount needed for Indigent health care services) percent of the increase will beused to pay’for services required by the Texas Legislature in the Indigent Health Care and Treatment Act.

. . . TaxCode 126,06(f). Finally. section 26.07 wasamendedby the addition of subsection (h)

. It is with this section that you are concerned. Section 26.07.
as amended,provides the folloving inpertinent part:

Sec. 26.07. Election to Repeal Increase. (a) If the governing body of a taxing unit other than aschool district adopts ataxrate that exceeds the rate calculated as provided bySection 26.04 of this code by more than eight percent, the qualified voters of the taxing unit bypetition may require that an election be held to determine whether or not to reduce the tax rate adopted for

p. 2901Honorable Bevil B.Wright- Page3 (JM-641)

the current year to a rate that exceeds the rate calculated as provided by Section 26.04 of this code byonly eight percent.

. . . . (d) If the governing body finds that the petition is valid (orfails to act within the time allowed), it shall order that an election be held in the taxing unit on a date not less than 30or more than 90days after the last day onwhich it could have acted to approve **or** disapprove the petition. **A**state lawrequiring local elections to be held onaspecified 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 theproposition: ‘Reducing the tax rate in (nameof taxing unit) for the current year from (the rate adopted) to (the rate that is only eight percent greater than the rate calculated as provided bySection 26..04of this code).’ (e) If a’majority of thequalified voters voting
on the question in the election favor the proposition, the 

### tax rate for the **taxing** unit for the current **year** is the tax rate that is eight percent greater than the rate calculated as provided by Section **26.04** of this code; othervise, the tax rate for the current year is the one adopted by the governing body.

. . . . (h) Notwithstanding Subsection (a) of thfs section, if in the first year after the effective governingbody date of this Act the unit other thanaschool district increases its **tax**

. rate to provide health care services that the governing body is required to provide to its residents under the Indigent Bealth **Care** andTreatment Act (S.B. 1, Acts of the 69th Legislature, 1st Called Session, 1985) the adopted tax rate that allows **voters** to seek to reduce the tax rate under this section mustexceed **the** rate calculated under Section 26.04 of this code by eight percent plus that rate which, applied tothe total taxable value submitted tothegoverning body, would impose **taxes** in an amount equal to the amount vhich the governing body would be required to pay out of property **taxes** to provide services requlred.by the,

p. 2902Honorable Bevil B.Wright - Page4 (JM-641)

Indigent Health Care and Treatment Act less the amount the governing body paid out of property taxes to provide the equivalent services In the preceding year and less any state reimbursement which the governing body expects to receive pursuant to Subtitle Dof Title 2of the Indigent Eealth Care andTreatment Act. (Emphasis added).

You first ask us (wlhether Bardin County is entitled to include in its adopted tax rate for 1986 an increase to provide for the additional cost of indigent health

care services required under the Indigent iiealth Care andTreatment Act andIf such increase would be subject to a rollback under amended section 26.07 of the Property TaxCode.

Weaddressed your first question In Attorney General Opinion JM-528 (1986). In that opinion, the question posed was:

tIln an instance in which there has been a successful tax rate rollback election andInwhich the adopted rate includes a rate increase attributable to the additional costs incurred by providing the indigent health care services required by the act, whether the rate increase for providing those health fare services is also rolled back.

We set out the amendments to each section of the Tax Code and discussed the legislative history of the portions of the bill at issue. Wethen concluded:

It is clear from a reading of the act that the provisions amendingthe TaxCode, taken together.

were meant toisolate that portion of thetax rate increase attributable to providing the services required by the act. It would makelittle sense for the legislature to require certain taxing units to offer specified health care services to indigents, to set forth tax rate calculation and notice procedures segregating from a tax rate increase that portion of the rate increase attrlbutable to the costs of providing such services, and to makethat percentage rate increase necessary to trigger the rollback provisions in the first place eight percent over the effective rate plus theportion of the rate increase attributable to the costs of providing the services, andthen to intend that the ‘rolled-back’ rate be set at

p. 2903Honorable Bevil 8. Wright- Page 5 (JM-641)

eight percent over the effective rate. The

. legislature did not intend a construction that would impair the ability of taxing units to provide the services required bythe **act.** Attorney General Opinion Jl4-528 at 5-6. **It** is clear from an even cursory reading of the amendmentsto the .TaxCodethat Hardln County is not merely “entitled” to include in its adopted tax rate for 1986
anincrease in tax rate attributable to the additional costs incurred bythe county of complying with the Indigent Health CareandTreatment Act; the county is required **to** do so. Andit is equally clear that any such 1986 percentage rate increase would not be subject to a rollback if asuccessful election were held pursuant to section 26.07 of the TaxCode. Therollback limitations applicable to health care taxation apply only **“ in**  the first **year** after the effective date of [the act],” 1985. TaxCode 126.07(h).

Younext ask
[wlhether theCommissioners Court of HardinCounty is required to order an election under amended section 26.07 **of** the Property TaxCodeif Hardin County is entitled to include in its adopted tax rate for 1986 an increase to provide for the additional **cost** of indigent health care services required under the Indigent Eealth Care and Treatment Act and if so what tax rate should be set. Again, we implicitly answered the first part of your second question in Attorney General Opinion m-528 (1986). Therein we declared that

[i]n aninstance in which a taxing unit provides services as required by the Indigent Health Care andTreatment Act and in which there has been a successful tax rate rollback election inthe first year in which those services are provided, subsection 26.07(a), when construed with subsection **26.07(h),** sets the ‘rolled-back’ rate at eight percent over the effective rate plus the additional percentage increase attributable to the costs of providing the services required by the **act.**
A corollary to this proposition is that the tax rate percentage increase that triggers the rollback provisions in.the first place is eight percent over the effective rate irrespective of any rate percentage increase attributable to the costs of providing indigent

p. 2904Bonorable~Bevil B.Wright - Page 6 (J&641)

health care andtreatment; the laygent health care portion is simply

. segregated out of the calculation.

Your final question is: [wlhether the effective tax rate as calculated by theCountyTaxAssessor according **to** section 26.04 of the Property Tax Code must be corrected if there has been an error made **by** the appraisal office in its Information provided to the County Tax Assessor after (1) the tax rate has been publicized as provided by section 26.04(e) of the Property Tax Code; (2) adopted by the county commissioners court; (3) Tax Statements havebeen sent; (4) the deadline of January 31has passed for thepaymentof taxes without penalty..

Weunderstand you to ask whether the county tax assessor is affirmatively required **to** re-calculate the effective tax rate after the tax plan has already been put into effect if the appraisal office has supplied to the assessor erroneous information uponwhich he based his effective tax rate calculation. Weanswer your question in the negative.

Section 26.01 of the Tax Code requires the chief appraiser to prepare andcertify to the assessor for each taxing unit that part of the appraisal roll for the appraisal district that lists the property taxable by the taxing unit. Subsections 26.04(a) and (b) provide the following: (a) On receipt of the appraisal roll, the

assessor for a taxing unit shall determine the total appraised value. the total assessed value, andthe total taxable value of property taxable by

1. For example, if the county’s effective tax rate were $.50/$100 valuation, the amountof tax rate increase attributable to indigent health care costs were $.05/$100 valuation, andthe amountof tax rate increase attributable to increased expenditures other than indigent health care were $.06/$100 valuation, the raterhat the county wouldseek toadopt is $.50 +5.05 +S.06. $.61/$100 valuation,
a 22% increase over the effective tax rate. The proposed rate increase percentage that would trigger the rollback provisions. however, is 12X, i.e. the $.06/$100 valuation increase attributable to non-indigent heal=are costs.

p. 2905Honorable Bevil B.Wright - Page 7 (JPI-641)

the unit. Re shall also determine, using information provided by the appraisal office, the appraised, assessed, andtaxable value of property added to the appraisal roll since the preceding tax year by annexation of territory and the appraised, assessed, and taxable value of the improvements on the roll that were made after January 1of the preceding tax year. Thesumof the taxable value of annexed property and the taxable value of improvements madeafter January 1 of the preceding tax year is the taxable value of
newproperty. (b) The assessor shall submit the appraisal roll for the unit showing the total appraised, assessed, andtaxable values of all property and the total taxable value of newproperty to the governing body of the unit byAugust 1or as soon thereafter aspracticable.

Subsections (c) and (d) of section 26.04 of the Tax Code then set forth the elaborate effective tax rate calculation required byarticle VIII, section 21, of theTexas Constitution.
The only affirmative obligations imposed by chapter 26 of the code on the taxing units’ assessors regarding the rate calculation

are specifically set forth therein. The code imposes no further affirmative obligation on the assessors. Indeed, the code offers no mechanism or procedure by means of which a taxing unit’s assessor could re-calculate theeffective rate. Thelegislature has created at subsection (h) of section 26.04 of the TaxCodearemedyin the event that the requirements of section 26.04 are not complied with. This provision sets forth the following:

Aperson whoownstaxable property is entitled to
an injunction prohibiting the taxing unit inwhich 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 andthe failure to complywas not in good faith.
After the tax plan hasbeenput into effect, theonly remedylies with
anaggrieved taxpayer seeking to enjoin enactment of the tax scheme. See. e.a.. State v. Whittenburg, 265S.W.2d 569 (Tex. 1954); Citv of

I

_ ~~~~ Arlington v. Ca=, 2 171S.W.2d 414 (Tex. 1954); Jackson v. 1 tiypearl Independent SC

,hool Districf, 392 S.W.2d 892 (Tex. Civ. 1- iPP- - Waco 1965, nowrit). Weconclude, then, that the assessor is not empowered to re-calculate the effective tax after the taxplan hasbeenput into

p. 2906Aonorable Bevil B.Wright - Page8 (JM-641)

effect; the exclusive statutory remedy is that created by the legislature in subsection (h) 06section 26.04.

SUMMARY

The county is required to include in its adopted tax rate for 1986 an increase sufficient to provide for the additional costs incurred because of the Indigent Health CareandTreatment Act. Anysuch increase would not be subject to the tax rate rollback provisions of section 26.07 of theTaxCode. Thecounty commissioners are not authorized to accept arollback election petition unless the rate adopted exceeds the effective tax rate by more than eight percent, calculated without regard for any percentage increase attributable to costs incurred by complying with the Indigent Eealth Care andTreatment Act. The tax assessor is not empoweredto re-calculate the effective tax rate after the tax plan is in effect in the event that the effective rate was incorrectly calculated. The only remedy which the legislature created in such an instance is set forth in subsection (h) of section 26.04 of the Tax Code and provides that a person who owns taxable property is entitled to aninjunction in certain instances.

Attorney General of Texas

JACKEIGETOWER First Assistant Attorney General
WARY RRLLER ExeqR.ive Assistant Attorney General

RICEGILPIN Chairman, Opinion Cossaittee Prepared byJimMoellinger Assistant Attorney General

p. 2907