ATTORNEY GENERAL OF TEXAS GREG ABBOTT

Mr. David U. Flores Williamson County Auditor Williamson County Courthouse 710 South Main Street, Suite 301 Georgetown, Texas 78626 DearMr. Flores: June 26,2012 Opinion No. GA-0954 Re: Calculation ofa county's rollback tax rate (RQ-1025-GA)

You askwhethera county may "adoptatax rate for aparticularproperty tax that is abovethe calculatedrollbacktax rate l for thattax andnottriggerthe [right] to petition [for] arollbackelection so long as the sum of all the county's adopted property tax rates [does] not exceed the combined rollback tax rate.,,2 The Texas Constitution generally authorizes counties to levy three individual property tax rates for funds dedicated to specific purposes: (1) the farm-to-market roadlflood control fund; (2) the general fund, the permanent improvement fund, the road and bridge fund, and thejury fund; and (3) the fund for further maintenance ofpublic roads. TEX. CONST. art. VIII, §§ I-a, 9. Before adopting its property tax rates, a county must calculate and publish an effective tax rate and a rollback tax rate, including an explanation of how they were calculated. 3 See TEX. TAX CODE ANN. § 26.04(a)-(e) (West 2008). Ifthe county "adopts a tax rate that exceeds therollback tax rate calculated as provided by [chapter 26 of the Tax Code]," then voters may petition for a rollback

lEach tax year, a local taxing unit examines its operating budget in relation to the total taxable value of properties located in the taxing unit'sjurisdiction in preparation for producing a property tax levy sufficientto meetthe unit's budgeted revenue needs
. The procedures used to determine tax rates depend on two benchmark rates known as the effective tax rate and the rollback tax rate. The effective taxrate is the rate that would provide the taxing unit with approximately the same amount ofrevenue it had the year before on properties taxed in both years. The rollbackrate, which is the maximum rate allowed by law without a voter approval process, is the rate that would provide the taxing unit approximately the same amountofrevenue it spentin the previous yearfor day-to-day operationsplus anextraeight percent cushion, and sufficient funds to pay its debts in the coming year. See generally TEX. COMPTROLLER OF PUB. ACCOUNTS, Truth in Taxationfor Taxing Units Other Than School Districts (July 2011)
. 2Letter from Mr. David U. Flores, Williamson Cnty. Auditor, to Honorable Greg Abbott, Tex. Att'y Gen. at 1 (Dec. 5, 2011), http://www.texasattorneygeneral.goY/opin ("Request Letter"). 'See TEX. COMPTROLLER OF PUB. ACCOUNTS, Form 50-211 (Rev. 05-06/8), Notice of Effective Tax Rate (for use by counties); Truth in Taxationfor Taxing Units Other Than School Districts at 8 (July 2011).Mr. David U. Flores

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election "to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate calculated as provided by [chapter 26]." Id. § 26.07(a). You illustrate your question with the following example: [I]f a county ... has calculated and published a rollback tax rate of $.27 for general fund purposes, and a rollback tax rate of $.03 for farm to market and flood control, for a total rollback tax rate of$.30, may it thereafter adopt a tax rate of $.28 for general fund purposes, and $.02 for farm to market and flood control, for a total tax rate of $.30
... [7] Request Letter at 2. Your question is whether the right to petition for a tax rollback election is triggered by the adoption ofa total, cumulative rate that exceeds the total rollback rate, rather than by the adoption ofany particular tax rate that exceeds its rollback counterpart.4 Ourresponsibilitywhenconstruinga statuteis to ascertaintheLegislature'sexpressedintent. TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432,439 (Tex. 2011). If the Legislature provides definitions for words it uses in a statute, then we use those definitions to construe the statute. City ofWaco v. Kelley, 309 S.W.3d 536,542 (Tex. 2010). The statutory term "rollbacktax rate for a county" is specifically defined as "the sum of the rollbacktax rates calculatedfor eachtype oftax the county levies." TEX. TAX CODE ANN. § 26.04(d) (West 2008) (emphasis added). Given the clear statutory definitionofthis term, therelevantinquiryis whetherthe sumtotal ofthe adopted tax rates exceeds the sum total of the rollback tax rates. Had the Legislature intended each individual adopted rate to be compared to each individual rollback rate, it would not have defined the term "rollback tax rate for a county" in this way. We presume that the Legislature chose its words deliberately. See In re M.N., 262 S.W.3d 799,802 (Tex. 2008) (when construing a statute, the courtpresumes that "theLegislature included each word in the statutefor a purpose . . . and that words not included were purposefully omitted"). See also TEX. GOV'T CODE ANN. § 311.021(3) (West 2005). A reference in section 26.07(a) to a rollback election also supports the conclusion that the event triggering the rightto petition for a tax rollback election is the adoption ofa total, cumulative rate that exceeds the total rollback rate. In a rollback election, voters determine whetherto "reduce the tax rate adopted for the current year to the rollback tax rate calculated as provided by [chapter 26]." TEX. TAX CODEANN. § 26.07(a), (d) (West2008) (emphasis added).' A statute giving avoter

4We assume for purposes of this opinion that a county's adoption of any particular tax rate is otherwise authorized and consistent with applicable law. You do not ask about, and we do not address, other legal limitations on a county's authority to set tax rates. 5"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 adopted) to (the rollback tax rate calculated as provided by this chapter).'" TEX. TAX CODE ANN. § 26.07(d) (West 2008) (emphasis added).

### Mr. David U. Flores

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the option of 

### reducing the adopted rate to the rollback rate is premised on the assumption that the adopted rate is higher than the rollback rate, suggesting that the term "adoptedrate" mustrefer to a cumulative quantity and not an individual component of the whole. 

### See Tex. Lottery Comm 'n v. 

### First State Bank ofDeQueen, 325 S.W
.3d 628, 635 (Tex. 2010) (the court "presume[s] the Legislature selected language in a statute with care and that every word or phrase was used with a purpose in mind"). 

### See also Jose Carreras, M
.D., P.A. v. 

### Marroquin, 339 S.W.3d 68, 73 (Tex. 2011) ("Statutes are interpreted to avoid an absurd result."). This office has previously opined on a similar question involving the statutory predecessor to Tax Code section 26.07. 6 

### Attorney General Opinion JM-677 (1987) considered whether an increase in either the general fund, the permanent improvement fund, the road and bridge fund, or thejury fund component ofthe tax rate that exceeded the effective tax rate for that fund by eight percent or more would trigger the tax rate rollback election provision. Tex. Att'y Gen. Op. No. JM-677 (1987). Citing multiple references in chapter 26 to the county's adopted rate as "the tax rate" and "atax rate," the opinion concludedthat the clear terms ofthe statute dictatedthatthe eight percenttax rate increase triggering the right to petition for atax rate rollback election applied to the 

### county's effective rate, not to the effective rate ofeach component ofa county's rate. 

### Id. at 2. As the opinion explained, "[a] reading ofchapter 26, as a whole, indicates that the tax rate rollback election provisions of section 26.07 may be invoked only in an instance in which the 

### total tax rate adopted exceeds the 

### totaleffective tax rate by eightpercent ormore. Ifthe legislature had intended that a county's component rates individually be limited to the three percent-eight percent rate increase limitations, itcould have easily so provided. Butit did not." 

### Id. at 4. Although chapter 26 has been amended sinceJM-677 was issued, the opinion's reasoning applies with equal force to the current version ofchapter 26. In sum, chapter26 oftheTax Code authorizes apetitionfor arollbackelection when the sum of a county's individually adopted tax rates exceeds the combined rollback rate, but under chapter 26's plain terms, the right to petition for a rollback election is not automatically triggered when a county adopts a rate for a particular tax that is above the rollback rate for that particular tax. 7

(,The previous language ofTax Code section 26.07 stated: "(a) Ifthe governing body ofa taxingunit otherthan a school district adopts a tax rate that exceeds the rate calculated as provided by Section 26
.04 ofthis codeby more than eightpercent, the qualified voters ofthe taxing unitby petitionmay requirethat an electionbe held to determine whether or not to reduce the tax rate adopted for the currentyear to a rate that exceeds the rate calculated as provided by Section 26.04 ofthis codeby only eightpercent." Act ofAug. 10, 1981, 67th Leg., 1st C.S., ch. 13, § 119, 1981 Tex. Gen. Laws 117, 165. 7you refer us to Attorney General Opinion GA-0775 (2010), in which we concluded that a school district may not increase the adopted maintenance and operation ("M&O") tax rate above the district's rollback M&O tax rate component withouttriggering arollbackelectionpursuantto section 26.08(a) oftheTaxCode. Wenotethatthe analysis in GA-0775 is based on different Tax Code provisions applicable only to school districts and not counties. Tex. Att'y Gen
. Op
. No. GA-0775 (2010) at 1. Thus, GA-0775 is not applicable to your inquiry.Mr. David U. Flores

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### SUMMARY Chapter 26 of the Tax Code authorizes a petition for a rollbackelection whenthe sumofacounty'sindividuallyadoptedtax rates exceedsthecombinedrollbackrate, butunderchapter26'splain terms, the right to petition for arollback election is not automatically triggeredwhen acounty adopts arate for aparticulartax thatis above the rollback rate for that particular tax.

DANIEL T. HODGE First Assistant Attorney General JAMES D. BLACKLOCK Deputy Attorney General for Legal Counsel JASON BOATRIGHT Chair, Opinion Committee Becky P. Casares Very truly yours,

Assistant Attorney General, Opinion Committee