Opinion Clarifies Rollback Rate Calculation
Attorney General Opinion No. GA-0954 (June 26, 2012) clarified the
calculation of the county rollback rate by holding that the rollback rate is
based upon the total of all tax rates adopted by the commissioners court. The issue involved a county that assesses and collects a “road and bridge special tax,” in addition to the general ad valorem tax.
Some background on the county tax rates may be helpful. All counties are authorized to assess general ad valorem taxes not to exceed $0.80 per $100 valuation (see Texas Constitution, Art. VIII, Section 1-a). By referendum, some counties have been authorized to assess a farm-to-market and flood control tax not to exceed $0.30 per $100, or a public road maintenance tax not to exceed $0.15 per $100 (see Texas Constitution Art. VIII, Section 9). The general ad valorem tax may be used to fund the general fund, the permanent improvement fund, the road and bridge fund, and the jury fund, and these taxes may be combined or transferred and used for any lawful purpose. The road and bridge special taxes may only be used for road and bridge, transportation, and flood control purposes.
Before adopting the property tax rates, a county must calculate and publish an effective tax rate and a rollback tax rate. If the rollback rate was separately calculated for any road and bridge special tax, it would severely limit the ability of commissioners court to adjust its budget to meet increased needs for road and bridge or the general fund. For example, if the road and bridge special tax were reduced from $0.02 to $0.01 per $100 and the rollback rate calculated separately, the rollback rate for the next year would only be $0.0108. Fortunately, the AG followed the clear legislative definition of the rollback rate as “the sum of the rollback tax rates calculated for each type of tax the county levies.” As stated by the AG, Chapter 26 of the Tax Code authorizes a petition for a rollback election 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 tax rate for a particular tax that is above the rollback rate for that particular tax.
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