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