RECOMMENDATION from the Director of Finance to place the proposed 2015 tax rate of $0.601120/$100 of value on the Wednesday, October 21, 2015 Council Agenda or such other date that meets the requirements of the Texas Property Tax Code, call three public hearings at which interested persons will be given the opportunity to be heard on the proposed tax rate and provide for the publication of the notice of such hearings and other related information.
SUGGESTED HEARING DATES:
6:00 P.M. – Tuesday - September 22, 2015 and
6:00 P.M. – Tuesday - September 29, 2015 and
9:00 A.M. – Wednesday – October 7, 2015
Place the proposed tax rate of $0.601120/$100 of value, which is lower than last year’s tax rate, on the October 21st Agenda. Set dates for three public hearings on the proposed tax rate and publish analysis of anticipated increased revenues pursuant to Sec. 44-27 of the Houston Code of Ordinances.
SPECIFIC EXPLANATION:
State law sets forth detailed requirements for the process of setting ad valorem tax rates, including public hearings, newspaper publications, and actions of the governing body. A city ordinance sets additional requirements for this process. These requirements include minimum and maximum time periods for each step in the process.
Effective Tax Rate and Rollback Tax Rate
Section 26.04 (e) of the Tax Code requires that the Effective Tax Rate and the Rollback Tax Rate be reported to the governing body of each taxing unit. The Effective Tax Rate for Tax Year 2015 is $0.603845/$100 of assessed value and the Rollback Tax Rate is $0.649410/$100 of assessed value.
Public Hearings
The Houston Code of Ordinances, Sec. 44-27 requires the City of Houston to hold at least three public hearings before adopting a tax rate expected to increase the City of Houston’s ad valorem property tax revenues for the current fiscal year in an amount greater than five percent more than the ad valorem property tax revenues collected during the immediately preceding fiscal year. The Code of Ordinances requires that two of the public hearings be held in the evening and one during the day. The Director of Finance must recommend dates and time for the required public hearings. It is recommended that City Council set the following dates and times for the hearings: September 22, 2015 at 6 PM; September 29, 2015 at 6 PM; and October 7, 2015 at 9 AM
Newspaper Publications
Chapter 26 of the Tax Code requires the City of Houston to publish newspaper ads before adopting a tax rate. Section 44-27 of the Houston Code of Ordinances requires that an analysis of anticipated increased revenues be published in the major Houston newspaper, when the ad valorem tax rate proposed is expected to produce ad valorem property tax revenue collections during the current fiscal year of more than five percent the ad valorem property tax revenues collected in the immediately preceding fiscal year.
Summary
City Council must pass a motion to place a specific proposed tax rate on a future City Council Agenda, set the dates and time for the public hearings and publish an analysis of anticipated increased revenues. The City Council meeting to vote on the proposed tax rate may not be earlier than the 10th day or later than the 14th day after the date of the last public hearing.
The proposed tax rate of $0.601120/$100 of assessed value must be apportioned between Maintenance and Operations (M&O) and Interest and Sinking Fund (I&S). The M&O rate is $0.442194/$100 of assessed value and the I&S rate is $0.158926/$100 of assessed value which, when combined, equal the total tax rate of $0.601120/$100 of assessed value.
It is therefore recommended that City Council pass a motion to place the proposed tax rate of $0.601120/$100 of value for tax year 2015 on the Agenda of City Council for Wednesday October 21, 2015, scheduling three public hearings on the proposed tax rate in City Council Chambers on September 22, 2015 at 6 PM; September 29, 2015 at 6 PM; and October 7, 2015 at 9 AM and publish analysis of anticipated increased revenues pursuant to Sec. 44-27 of the Houston Code of Ordinances.