The rollback process starts after a taxing unit formally adopts a tax rate. If the trustees of a school district adopt a tax rate that exceeds the voter-approval rate, it must automatically hold a tax rate ratification election (TRE). 1 If a taxing unit other than a school district adopts a tax rate that exceeds the rollback tax rate, voters in the taxing unit may petition for an election on the tax increase. 2 A successful election limits the taxing unit's current tax rate to the rollback tax rate. 3
While water districts follow Water Code provisions in most truth-in-taxation matters, they must follow procedures in the Tax Code when it comes to a rollback election. 4
By providing the information below, the Comptroller's office provides technical assistance and not legal advice. Taxing units should consult legal counsel for interpretations of law regarding rollback elections.
A school district is required to hold an automatic voter-approval election - without the petition process - to ratify a current year's tax rate if it adopts a tax rate above the rollback tax rate. 5 The election date cannot be earlier than 30 days or later than 90 days after the date the school board adopted the tax rate. 6 School districts that adopt a tax rate before adopting the budget based on the chief appraiser's certified estimate of taxable value must order the voter-approval election at least 30 days prior to the election date. 7
More information about rollback election procedures may be obtained from the Election Division of the Texas Secretary of State's Office. The election ballot must contain statutory language that states the voter is voting for or against ratifying the adopted tax rate, rather than limiting the rate to the rollback tax rate. 8 While the Comptroller's office provides a Sample Voter-Approval Ballot, school boards should consult legal counsel for guidance.
If a simple majority of the votes cast in the election favor the adopted tax rate, the adopted tax rate stands. 9 If the voters disapprove the adopted tax rate, the governing body may not adopt a tax rate that exceeds the rollback tax rate. 10
School districts are not required to ratify their tax rates when responding to a disaster. 11 No election is called if the school district is spending increased revenue to respond to a disaster for the year following the year in which the disaster occurred. 12 Disasters include tornadoes, hurricanes, floods, wildfires or other similar events that affect the school district, but do not include drought. 13 The tax rate adopted is only good for the current year for which the rate is adopted. If a district adopts a tax rate for the amount by which that rate exceeds the district’s voter-approval tax rate for that tax year may not be considered when calculating the district’s voter-approval tax rate for the tax year following the year in which the district adopts the tax rate. For these purposes, a disaster exists only if the governor requests federal disaster assistance for the area. 14
If a taxing unit other than a school district adopts a tax rate that exceeds the rollback tax rate, voters in the taxing unit may petition for an election on the tax increase. 15Step 1: Petition for an election
A petition must meet specific requirements. 16 It must state that it is intended to require an election to reduce the tax rate for the current year. 17 If the tax rate adopted for the current year by the taxing unit imposes maintenance and operations (M&O) taxes of $5 million or more, seven percent of the registered voters shown on the most recent official voter list must sign the petition. 18 If the tax rate adopted by a taxing unit imposes taxes for M&O of less than $5 million, the signatures of 10 percent of the registered voters in that taxing unit are required on a petition. 19 Voters must submit the petition to the taxing unit's governing body within 90 days of the tax rate adoption. 20
The Tax Code does not specify the wording required for a rollback petition, nor does it state the form that the petition must take. 21 Taxpayers must, however, include several items of information on a rollback petition to assist the governing body in determining validity: printed name of voter, birth date or voter registration number, home address and date of signature. 22 If the taxing unit is located in more than one county and the voter registration number is required, the voter must also include the name of the county in which he or she is registered. 23
To be valid, a voter's signature is not required to appear exactly as the voter's name appears on the most recent official voter registration list. 24 If the taxing unit's governing body is unable to verify a particular voter's signature, it will look to the petition for some reasonable means to verify, such as home address. 25 The governing body may require the petition's organizer to provide such information for that particular voter, if the organizer wishes for the signature to be counted. 26 Signatures collected more than 180 days before the petition is presented are not valid. 27
While the Comptroller's office provides a Sample Tax Rate Rollback Petition, persons who are considering circulation of a rollback petition or a governing body that is considering the validity of a rollback petition should consult legal counsel for guidance.
The taxing unit's governing body is responsible for determining if a rollback petition presented to it is valid. 28 Once the governing body determines that a petition is valid, it must adopt a resolution regarding its validity within 20 days of receiving it. 29 If the governing body takes no action within that time, the petition is automatically valid. 30
If the governing body finds the petition invalid, it may be a good practice for the resolution or order setting it aside to specify the reasons why it is invalid. The taxing unit should consult its legal counsel on this matter.Step 3: Hold election, if necessary
If the governing body for a taxing unit determines the rollback petition is valid, the governing body must set a rollback election date. 31 This date cannot be earlier than 30 days or later than 90 days after the last date the governing body could have ruled on the validity of the petition. 32
The requirement that local elections be held on a specified date does not apply to this election, unless a specified date falls within the permitted 30 to 90 days. 33 More information about election dates may be obtained from the Election Division of the Secretary of State's Office.
The election ballots must contain statutory language that permits voting for or against the proposition. 34 While the Comptroller's office provides a Sample Tax Rate Rollback Ballot, governing bodies should consult legal counsel for guidance.
The taxing unit's delinquency date is postponed by the number of days between the date original bills were mailed and the date the corrected bills were mailed. 39Refunds
If the taxing unit has begun collecting taxes at the time of the election, some taxpayers may have paid taxes under the original tax rate. The taxing unit must refund the difference between the taxes paid under the original tax rate and taxes levied under the rollback tax rate. 40 The taxing unit has 60 days from the date the election results are counted to send refunds. 41
A taxing unit sends refunds resulting from a rollback election if the refund amount is $1 or more. 42 If the amount is less than $1, the taxing unit shall refund the difference upon the taxpayer's request. 43 The taxpayer must apply for the refund of less than $1 within 90 days after the date the refund becomes due or forfeit the right to the refund. 44
After 60 days, taxing units must pay interest on refunds. 45 The interest is 1 percent per month, or part of a month, from the date that the election results were certified to the date the refund is mailed. 46
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