Court Opinion

ID: 4130828
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:08:53.88706+00
Date Added: 2024-06-11T14:33:08.022365
License: Public Domain

March 2.    1987
.lIYl  MxrrGX
X,-‘=GRSEY      GESERAL

                   Eonorable Bevil B. Wright              Opinion No. JM-641
                   Hardin County Attorney
                   P. 0. Box 516                          Re: Whether a county tax rate increase
                   Kountze , Texas   77625                to provide    for indigent    health  care
                                                          services   is   subject  to    a rollback
                                                          election  under section     26.07 of the
                                                          Tax Code, and related questions

                   Dear Ms. Wright:

                          The Sixty-ninth     Legislature     enacted  in special     session    the
                   Indigent Health Care and Treatment Act [hereinafter            the act],    which
                   requires govermaental entities       to provide certain health care services
                   to Indigent rqsldents.       Acts    1985, 69th Leg.,   1st C.S.,    ch. 1, at
                   3777.     Sections 2 and 3 of Ehe act amended sections 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, and for the tax rate rollback petition         and election   procedures,
                   respectively,     with which taxing units must comply.       You ask us three
                   questions      regarding  the effect      of   the act and its       amendatory
                   provisions.

                          Section 26.04 of the Tax Code sets forth the method by which the
                   so-called     “effective    tax’rate”     is calculated     by each taxing unit prior
                   to the adoption of its ad valorem 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 amount of revenue that was produced last year.                      See
    5
                   Tex. Const. art. VIII,            section    21; Attorney General Opinion MW-m
                   (1982).     Section 26.05 of the 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 on the
                   proposed increase and publish a specified               public notice of the meeting
                   prior to Its being held.            See Tax Code 126.06.         Section    26.07 of the
                   Tax Code permits qualifiedxters                 of the taxing unit by petition          to
                   require that a tax 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’ Tax Code 526.07(a).

                                                         p. 2900
Ronorable   Bevil   B. Wright - Page 2         (JM-641)

      The amendments to sections      26.04,    26.06, and 26.07 of the Tax
Code contained in the act effectively        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 include among the Items of information         that the
taxing unit is required to publicize        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 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,      if any, received     or expected for
            either year.

Tax Code 926.04(e)     (4).

       Section   26.06 was amended by the addition       of subsection   (f).
vhich lists the items of information        that the published notices    for
the ad valorem tax rate increase 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 providing        the required indigent health care
services.     Each such notice  must contain the following:

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

Tax Code 126,06(f).

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

            Sec.    26.07.    Election    to Repeal Increase.

                (a)   If the governing body of a taxing unit
            other than a school district     adopts a tax rate that
            exceeds the rate calculated     as provided by Section
            26.04 of this code 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 to reduce the tax rate adopted for

                                         p. 2901
Honorable   Bevil   B. Wright - Page 3      (JM-641)

            the current year to a rate that exceeds the              rate
            calculated  as provided by Section 26.04 of              this
            code by only eight 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 days 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 specified       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 adopted) to (the rate that is only eight
            percent       greater   than  the     rate    calculated    as
            provided by Section 26..04 of this code).’

                (e) If a’majority of the qualified   voters voting
            on the question in the election    favor the proposi-
            tion,   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
          date of this Act the governingbody
          unit other than a school district      increases its tax
        . rate    to provide health     care services     that the
          governing body is required to provide to its resi-
          dents under the Indigent Bealth Care and Treatment
          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 must exceed the rate calculated         under
          Section 26.04 of this code by eight percent plus
          that rate which, applied to the total taxable value
          submitted to the governing 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. 2902
Honorable   Bevil   B. Wright - Page 4          (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 D of Title   2 of the Indigent
            Eealth Care and Treatment 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 and Treatment Act and If such increase would
             be subject    to a rollback  under amended section
             26.07 of the Property Tax Code.

     We addressed   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    and In which
             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.    We then concluded:

             It is clear from a reading of the act that the
             provisions     amending the Tax Code, taken together.
             were meant to isolate        that portion of the tax rate
             increase     attributable      to providing      the services
             required by the act.           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     segregating      from a tax rate
             increase that portion of the rate increase attrl-
             butable to the costs of providing              such services,
             and to make that percentage rate increase neces-
             sary to 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

                                      p. 2903
Honorable 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 by the act.

Attorney General Opinion Jl4-528 at 5-6.          It  is clear from an even
cursory reading of the amendments to the .Tax Code that Hardln County
is not merely “entitled”   to include in its adopted tax rate for 1986
an increase in tax rate attributable       to the additional    costs incurred
by the county of complying with the Indigent Health Care and Treatment
Act; the county is required to do so.           And it is equally clear that
any such 1986 percentage rate increase           would not be subject     to a
rollback   if a successful election    were held pursuant to section 26.07
of the Tax Code. The rollback       limitations    applicable  to health care
taxation   apply only “in the first      year after    the effective   date of
[the act],” 1985. Tax Code 126.07(h).

     You next ask

           [wlhether the Commissioners Court of Hardin County
           is required      to order an election   under amended
           section    26.07 of the Property Tax Code if 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 an instance 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 rate rollback       election    in the 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. 2904
    Bonorable~Bevil     B. Wright - Page 6      (J&641)

    health care and treatment; the laygent            health   care portion    is   simply
.   segregated out of the calculation.

         Your   final   question   is:

                [wlhether the effective      tax rate as calculated  by
                the County Tax Assessor 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 have been
                sent; (4) the deadline       of January 31 has passed
                for the payment of taxes without penalty..

    We understand you to ask whether the county tax assessor         is affirma-
    tively 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    upon which he based
    his effective    tax rate calculation.    We answer your question        in the
    negative.

          Section 26.01 of the Tax Code requires        the chief appraiser   to
    prepare and certify  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,
                and the total taxable value of property taxable by

          1. For example,         if   the county’s      effective     tax rate       were
    $.50/$100 valuation,      the    amount of tax   rate   increase   attributable      to
    indigent health care costs were $.05/$100 valuation,             and the amount of
    tax rate increase      attributable     to increased     expenditures     other than
    indigent   health care were $.06/$100          valuation,      the raterhat        the
    county would seek to adopt 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. 2905
Honorable Bevil       B. Wright - Page 7     (JPI-641)

            the unit.     Re shall  also determine,         using in-
            formation provided by the appraisal           office,  the
            appraised,  assessed, and taxable 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 1 of the preceding tax year.           The sum of
            the taxable value of annexed property              and the
            taxable value of improvements made after January 1
            of the preceding tax year is the taxable value of
            new property.

                (b)   The assessor    shall submit the appraisal
            roll   for the unit showing the total     appraised,
            assessed,   and taxable values of all property and
            the total    taxable value of new property    to the
            governing body of the unit by August 1 or as soon
            thereafter   as practicable.

Subsections   (c) and (d) of section   26.04 of the Tax Code then set
forth  the elaborate effective tax rate calculation required by article
VIII, section 21, of the Texas 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      the effective    rate.    The legislature   has created at
subsection    (h) of section     26.04 of the Tax Code a remedy in the event
that the requirements of section           26.04 are not complied with.         This
provision   sets forth the following:

            A person who owns taxable property is entitled      to
            an injunction  prohibiting  the taxing unit in which
            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 and the failure    to comply was not in
            good faith.

After the tax plan has been put into effect,     the only remedy lies with
an aggrieved taxpayer seeking to enjoin enactment of the tax scheme.
See. e.a..
         I _ State
              ~~~~   v. Whittenburg, 265 S.W.2d 569 (Tex. 1954); Citv of
Arlington v. Ca=,        2171 S.W.2d 414 (Tex. 1954); Jackson v. 1tiypearl
Independent SC,hool Districf,      392 S.W.2d 892 (Tex. Civ. 1-iPP- - Waco
1965, no writ).     We conclu de, then, that the assessor is not empowered
to re-calculate    the effective  tax after the tax plan has been put into

                                   p. 2906
Aonorable   Bevil   B. Wright - Page 8       (JM-641)

effect;     the   exclusive   statutory    remedy is        that    created    by   the
legislature     in subsection   (h) 06 section 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 Care and Treatment
            Act.     Any such increase would not be subject               to
            the tax rate rollback provisions           of section     26.07
            of the Tax Code. The county commissioners are not
            authorized to accept a rollback           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 and Treatment Act.                 The
            tax assessor      is not empowered to re-calculate          the
            effective    tax rate after the tax plan is in effect
            in the event that the effective                rate was in-
            correctly     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 an injunction       in
            certain instances.

                                                 Attorney   General of Texas

JACK EIGETOWER
First Assistant Attorney       General

WARYRRLLER
ExeqR.ive Assistant     Attorney General

RICE GILPIN
Chairman, Opinion Cossaittee

Prepared by Jim Moellinger
Assistant Attorney General

                                     p. 2907