Court Opinion

ID: 4130939
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:10:09.304024+00
Date Added: 2024-06-11T14:27:20.279225
License: Public Domain

The Attorney                  General of Texas

JIM MAlTOX                                             July    28.   1986
Attorney General

Supreme Cairl Building         Honorable   Ray Farabt,e, Chairman                    Opinion     No. JM-528
P. 0. BOX 1254s
                               Committee on State Affairs
Austin. TX. 76711. 2546
5121475.2Wl’                   Texas State Senate                                    Re:    Tax rate of a county after             a
Telex 910/674-1387             P.O. Box 12068                                        successful      election    under section
Telecopier 512/4750266         Austin,   Texas   78711                               26.07 of the Property           Tax Code to
                                                                                     rollback      an adopted       tax rate     if
714 Jackson, Suite 70-I
                               Honorable   Chet Brooks,    Chairman                  the    adopted       rate     includes      an
Dallas. TX. 75202.4506         Health and Human Res:ources Committee                 increase     to provide      for the addi-
214l742-6944                   Texas State    Senate                                 tional     cost     of   indigent      health
                               P. 0. Box 12068                                       care services        reauired     under the
                               Austin,   Texas      7871,l                           Indigent       Health -Care and Treat-
4624 Al& wla Ave., Suite 160
El Paso, TX. 799052793
                                                                                     ment Act
91515221
-.-.--- a464                   Honorable    John Trae&er, Chairman
                               Committee on Intergwernmental
                                  Relations
r;c    Texas, Suite 700        Texas State    Senate
      ston, TX. 77002-3111
                               P. 0. Box 12068
2~I.i/223-5666
                               Austin,   Texas     7871,l

806 Broadway, Suite 312        Gentlemen:
Lubbock, TX. 79401.3479
6W747.5236
                                      The Sixty-nint.h           Legislature        enacted      in    special       session      the
                               Indigent      Health Carl? and Treatment Act [hereinafter                     “the act”]       which,
4309 N. Tenth, Suite S         inter    alia,    require3       governmental      entities      to provide       certain      health
McAllen. TX. 76501-1665        care services        to ind:.gent      residents.        Acts 1985, 69th Leg.,            1st C.S.,
51216624547                    ch.    1, at 1.        SecUons       2 and 3 of the act amended sections                       26.04,
                               26.06,    and 26.07 of the Tax Code, which set forth the requirements                              for
200 MaIn Plan, suite 4w        the effective          ad valorem       tax rate       calculation,        for    notice      of the
San Anlo?fo, TX. 762052797     public    meetings      prit’r to the adoption          of the tax rate,         and for the tax
512/225.4191                   rate    rollback       petil:ion     and election        procedures,       respectively,         with
                               which taxing units mu,st comply.                Your question        focuses     upon the proper
                               construction        of the:,e amendments.            Essentially,       you wish to know, in
 An Equal Opportunity/
 Affirmative Action Employer   an instance        in which there has been a successful                      tax rate       rollback
                               election      and in whic.b the adopted rate includes                  a rate increase         attri-
                               butable      to the add:ltional          costs    incurred      by providing         the indigent
                               health     care services         required     by the act,       whether the rate increase
                               for    providing       those, health       care    services      is also      rolled     back.        We
                               conclude      that the r;.te increase          attributable        to the costs       of providing
                               the services          requi:red     by the act        is not reduced            pursuant      to the
                               rollback      provision.

                                                                         p.   2428
Honorable Bay Parabee
Honorable Chet Brooks
Honorable John Traeger
Page 2 (JM-528)

        Section     26.04 of the Tax Code sets forth                the method by which the
so-called      “effective      tax ra:e” is calculated           by each taxing unit prior
to the adoption          of its ad Jalorem tax rate.               The “effective        tax rate”
is that tax rate which, when imposed upon the property                            that was taxed
last     year     but    using     this;    year’s    appraised        values,      will    produce
approximately        the same amout          of revenue which was produced last year.
See Tex. Const. art. VIII,               section   21; Attorney       General Opinion MW-495
(1982).       Section     26.05 of tie Tax Code provides              that, if a taxing unit
adopts     a tax rate that exceeds               the effective        tax rate by more than
three percent,         the taxing unit must hold a public                hearing,      as provided
by section       26.06 of the Tax Code, on the proposed                   increase     and publish
a specified        public     notice      of the meeting        prior      to its     being    held.
Section     26.07 of the Tax Code permits                qualified       voters    of the taxing
unit by petition          to require       that a tax rate rollback            election     be held
if   the adopted         rate   exceelis      the effective       rate by more than eight
percent.        If the election         is successful.      the adopted rate is reduced
to “a rate that exceeds              ths rate calculated          by Section       26.04 of this
code by only eight percent.”                 Tax Code §26.07(a).

       The amendments to sections         26.04,    26.06,   and 26.07 of the Tax
Code contained   in the act tffectively          segregate   out the amount of 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 IncluLe among the items of information                 that the
taxing   unit is required      to .publicise     in connection     with the calcula-
tion 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    that    the amount of
              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,       I? any, received     or expected     for
              either   year.

Tax Code 126.04(e)        (4).

       Section    26.06  was am’znded by the addition         of subsection       (f),
which lists      the items of :Lnformation    that the published       notices      for
the ad valorem tax rate in::cease       and for the vote on the adoption              of
the tax rate must contain        for those    taxing   units    that offer     health
services     as required  by the? act.   Each notice     is required     to specify
explicitly     the percentage   of the tax rate      increase     which is attri-
butable     to the costs   of pzoviding   the required      indigent   health    care
services.      Each such notice  must contain    the following:

                                          p.   2429
Honorable  Ray Farabee
Honorable   Chet Brooks
Honorable   John Traeger
Page 3    (JM-528)

           (Percentage    of increase     over the tax rate required
           to levy     amount ,loeded      for indigent   health   care
           services)    percent    of the increase    will be used to
           pay for services      required    by the Texas Legislature
           in the Indigent      Bealth Care and Treatment Act.

Tax Code 526.06(f).

      Finally, section   26.0;  was amended by the addition                 of subsection
(h) .  It is with this section     that you are concerned.                 Section  26.07,
as amended, provides   the fallowing    in pertinent part:

            Sec.       26.07.       Election    to Repeal   Increase.

                (a)    If   the Islverning      body    of a taxing     unit
            other than a schcol       district     adopts a tax rate that
            exceeds    the rate ;:alculated       as provided    by Section
            26.04 of this co&! by more than eight percent,                the
            qualified     voters of the taxing unit by petition          may
            require      that   an- election      be held     to determine
            whether or not t3 reduce           the tax rate adopted       for
            the current       year-to   a rate     that exceeds    the rate
            calculated      as p&ided        by Section     26.04   of this
            code by only eigt‘E percent.

                   .   .   .    .

                 (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 da1.s 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 spe:cified            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 adopte’i)         to (the rate that is only eight
            percent       g;ester       than    the     rate     calculated      as
            provided     by Section       26.04 of this code).’

                (e) If a majo:r:tty of the qualified     voters voting
            on the question    in the election     favor the proposl-
            tion,   the tax ra.te for     the taxing     unit  for  the
            current   year is t’he tax rate that is eight percent
            greater    than the rate    calculated     as provided    by

                                               p.   2430
Honorable   Ray Farabee
Honorable   Chet Brooks
Honorable   John Traeger
Page 4    (JM-528)

             Section   26.04 of        ,this code ; otherwise, the tax rate
             for   the current          year is the one adopted      by the
             governing   body.

                  . . . .

                  (h)     Notwithst~rding           Subsection          (a)      of    this
             section,       if in tl”! first         year after         the effective
             date of this           Act the governing            body of a taxing
             unit other than a-school              district       increases        its tax
             rate’ to provide Ihealth                care      services         that    the
             governing       body is required           to provide        to its resi-
             dents under the Indigent               Health Care and Treatment
             Act     (S.B.       1, ACES of the 69th Legislature,                        1st
             Called       Session,      F985) the adopted              tax rate        that
             allows      voters     to ;eek to reduce the tax rate under
             this section          must-exceed      the rate calculated               under
             Section       26.04 of -this        code by eight            percent      plus
             that rate which,           g>plied to the total             taxable value
             submitted        to the governing        body, would impose taxes
             in    an amount           equal     to     the     amount        which      the
             governing         body would be required                 to pay out of
             property       taxes to-provide          services       required        by the
             Indigent        Bealth     Fare and Treatment              Act less         the
             amount the gover%ng                body paid          out of property
             taxes      to provide         the equivalent           services        in the
             preceding         year    a;id less      any state          reimbursement
             which the governi&             body paid out of property                 taxes
             to provide         the equivalent       services       in the preceding
             year     and less        a,,    state    reimbursement            which the
             governing         body     expects      to     receive       pursuant        to
             Subtitle       D of Ti,zLe 2 of the Indigent                   liealth Care
             and Treatment Act.              (Emphasis added).

       Your question      arises   because    the act did not expressly           amend
subsections      26.07(a)   and 26.07(e)    of the code.        You express    conc~ern
that, were the election        to rollback   the tax rate increase,       the tax for
indigent    health    care would be rolled      back as well.       Such an interpre-
tation   would require     an isolated    and mechanical     reading of subsections
26.07(a)    and 26.07(e)     and would ignore     subsection    26.07(h).

       We must look to the :ntent            of the legislature         and construe      the
statute     to give      effect    to that      intent.       Knight   v.   International
Harvester     Credit    Corp.,   62;’ S.W.2d 382 (Tex.         1982);  State v. Terrell,
588 S.W.2d 784 (Tex.      197!)).   If    a statute       is susceptible       to two
constructions,        one which zill       carry    out and the other          defeat     the
legislative      intent,     the statute     should     receive    the former construc-
tion.     Citizens     Bank of Bryan v. First        State Bank, Hearne, 560 S.W.2d
334 (Tex.       1979).     A statute     should     be construed       as a whole;        one   ?

                                           P. 2431
Honorable   Ray Farabee
Honorable   Chet Brooks
Aonorable   John Traeger
Page 5    (JM-528)

provision    should not be given a meaning out of harmony or inconsistent
with other      provisions,    even though it might be susceptible           to such
construction      if standing    a:lone.   Merchants Fast Motor Lines,       Inc. V.
Railroad     Commission     of Texaza. 573 S.W.Zd 502 (Tex.       1978);     Barr V.
Bernhard,     562 S.W.i!d 844 (l’ex.     1978).   Noreover, a statute    should not
be construed      so as to lead to a foolish      or an absurd result.      McKinney
V. Blankenshie.       282 S.W.2d 691 (Tex. 1955); State ex rel.        Childress  v.
School Trustees       of Shelby Czlnty,     239 S.W.2d 777 (Tex. 1951).

       In a brief      submitted   with your request         for an opinion,     you point
out that the legislative          h:tstory    of the bill       supports  your construc-
tion of the amendments.          The bill     analysis    of the committee substitute
to House Bill No. 1843. which was the version                  of the act introduced      in
the House during         the reguls:c    session     of the Sixty-ninth      Legislature,
declares      an intent     to exclude       entirely     from the operation        of the
rollback     provisions     any tax rate increase          attributable    to additional
costs    incurred    for providing     the services      required    by the act:

              County    and hosp::tal   district    spending  to meet
              state   mandated mfuimum standards       is exempt from
              tax   rollback   election    requirements.     (Emphasis
              added).

See House    Committee     on Public   Health.              Bill    Analysis,     House Bill
Littee      Substitute,    69th Leg.,  1st C.S.             (1985).     The evident     intent
of the amendments was alscr indicated         in            the fiscal      notes   that were
prepared  for House Bill      No, 1843, stating              that the effect      of the act
on units of local     government would include               the following:

              Some counties       would be required     to increase  their
              expenditures       for indigent    health   care.   The bill
              provides     for     an *exemption to the tax rollback
              provision     for taxing units      to the extent that the
              tax rate       increase    is necessary     to provide   the
              health care.        (Em&asis    added).

Fiscal  Note, H.B. No. 1843, 69th Leg.,      1st C.S.   (1985).   The Fiscal
Note for the proposed committee  substitute     for House Bill No. 1843 and
for Eouse Bill No. 1843, as engrossed,    both contain    the same language.

       It   is    clear     from a reading           of    the act      that    the provisions
amending the Tax Code,               t&hen together,         were meant to isolate            that
portion     of     the   tax     rate     increase      attributable        to providing        the
services     required      by the ;%ct.         It would make little             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      segregati”8       from a tax rate increase            that portion     of
the    rate     increase       attrlbitable        to    the    costs     of    providing     such
services,      and to make thiit: percentage                 rate     increase     necessary      to

                                            p.   2432
Ronorable Ray Farabee
Honorable Chet Brooks
Honorable John Traeger
Page 6 (313-528)

trigger    the rollback    provisions   in the first      place eight  percent    over
the effective      rate plus the: portion     of the rate increase     attributable
to the costs      of providing     the services.    and then to intend       that the
"rolled-back"      rate be set at 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 by the act.

       Accordingly,      we construe       the phrase of subsection         (h! "[nlotwith-
standing     [slubsection       (a) ',:C this section        . . ." to effect      an excep-
tion   to subsection        (a):      in an instance        in which there      has been a
successful      tax rate rollbac,k        election    in the first      year that a taxing
unit has incurred         additionz;l.    costs    for providing     services   as required
by the act,       the rate is set at eight percent              over the effective        rate
plus the additional         perceniage       increase    attributable      to the costs      of
providing     the services       required     by the act.

                                       SUMMARY

                  In an instanw       in which a taxing unit provides
             services    as required      by the Indigent         Health Care'
             and Treatment       Act and in which there has been a
             successful     tax rste rollback       election     in the first
             year in which those          services     are provided,        sub-
             section    26.07(a),     when construed        with subsection
             26.07(h),     sets    :be "rolled-back"          rate   at eight
             percent      over     he     effective        rate     plus     the
             additional     percentage     increase    attributable       to the
             costs    of providing      the services        required     by the
             act.

                                                     Very   trul    yours.

                                                      L-1        iv%
                                                     JIM      HATTOX
                                                     Attorney  General       of Texas

JACK HIGHTOWER
First Assistant Attorney          Gwleral

NARY KELLER
Executive Assistant        Attorwy      General

RICK GILPIN
Chairman, Opinion        Committela

 Prepared    by Jim Moellinger
 Assistant    Attorney General

                                       p.   2433