2010
TML RESOLUTION COVER SHEET
Sponsoring Entity: TML Legislative Policy Committee on Municipal Revenue and Finance
Brief Background: This resolution is the report of the TML Legislative Policy Committee on Municipal Revenue and Finance. It represents the culmination of the work undertaken by the Committee members. In this resolution, the Committee makes its recommendations regarding legislative priorities.
What the Resolution is Intended to Accomplish: This resolution and the accompanying Committee report are intended to assist the membership and the TML Board in identifying priority legislative issues. Most, if not all, of the issues described in the report are self-explanatory. Any of the issues can be fully described and explained by Committee members and/or the TML staff during the Resolutions Committee meeting and the Annual Business Meeting.
How the Resolution is City-Related/How it Addresses a Municipal Issue: This resolution addresses issues that have been identified as city-related by Committee members.
Statewide Importance: The issues addressed in this resolution and Committee report are of statewide importance almost by definition. The Committee included members from each part of the state, and the Committee members carefully considered statewide importance – and other factors – when making recommendations.
Submitted By: Committee Chair Webb Melder, Mayor, Conroe
For further information: Bennett Sandlin, TML Executive Director, 512-231-7400
1.
A RESOLUTION ADOPTING THE REPORT OF THE 2010 TML LEGISLATIVE POLICY COMMITTEE ON MUNICIPAL REVENUE AND FINANCE
WHEREAS, the 2010 TML Legislative Policy Committee on Municipal Revenue and Finance was appointed by TML President Debra McCartt in early 2010; and
WHEREAS, more than 50 municipal officials from cities of every size across the state served on the Committee; and
WHEREAS, the Committee studied numerous issues relating to revenue and finance; and
WHEREAS, the Committee has completed its work and has drafted the attached report;
NOW, THEREFORE, BE IT RESOLVED by the delegates assembled at this 2010 Annual Conference of the Texas Municipal League that the attached report of the TML Legislative Policy Committee on Municipal Revenue and Finance be accepted and adopted.
PASSED AND APPROVED by the membership of the Texas Municipal League this 29th day of October, 2010, at Corpus Christi, Texas.
APPROVED: Debra McCartt, President
ATTEST: Bennett Sandlin, Executive Director
TEXAS MUNICIPAL LEAGUE
LEGISLATIVE POLICY COMMITTEE ON
MUNICIPAL REVENUE AND FINANCE
Final Summary of Actions Taken
May 7 and August 6, 2010
The committee voted to seek introduction and passage of legislation that would:
- convert the sales tax reallocation process from a ministerial process into a more formalized administrative process that would, at a minimum, require prior notice to all affected parties and impose a time limit of three years on the right of a claimant to request a refund.
- authorize cities—in relation to annexation, planned annexation, voluntary annexation, or negotiated annexation—to replace some or all ESD sales taxes in an area with city sales taxes, provided an ESD’s existing sales tax debt is proportionately and reasonably provided for in some manner.
The committee voted to support legislation that would:
- simplify the effective tax rate calculation for notice purposes only, provided the legislation would have no effect on the underlying effective tax rate and rollback tax rate calculations themselves, nor upon the hold harmless exemptions to those rates.
- clarify that the “Prop 2” pollution control property tax exemption isn’t meant to apply to the environmental characteristics of end products.
- amend Section 11.1825 of the Tax Code by adding a requirement that community housing development organizations (CHODOs) must receive an exemption from taxation from any affected municipality prior to receiving a tax exempt status from the local property tax appraisal district.
- return appraisals of oil and gas properties to the pre-H.B. 2982 (2007) methodology.
- create a new council-option city sales tax for property tax relief that may exceed the two-percent local cap.
- automatically convert existing sales taxes for property tax relief to any newly-created sales tax for property tax relief that would not count against the two-percent local cap.
- apply hotel occupancy taxes to RV parks, except for stays of longer than 30 days.
- expand the sales tax base, but only if the city tax base fully benefits from the expansion.
- increase future local parks funding.
- permit cities to share tax proceeds with other cities as part of a voluntary Chapter 380 economic development agreement.
- permit a city, by vote of the citizens, to withdraw from an ESD, provided the city will provide fire service inside the city’s limits.
- permit a municipal development district’s (MDD) sales tax, notwithstanding a competing ESD sales tax, to apply in the ETJ, as current law allows, provided an ESD’s existing sales tax debt is proportionately and reasonably provided for in some manner.
- provide for the popular election of ESD boards of directors.
- authorize the expenditure of hotel occupancy taxes on the costs of conducting audits of potentially delinquent taxpayers.
- change the eight-percent statutory interest rate on property tax refunds under Tax Code Section 42.43 to the rate of the 3-month treasury bill, as referenced in other portions of that section, as of the date of settlement.
The committee voted to endorse legislation that would:
- require mandatory disclosure of real estate sales prices.
- modify the Super Freeport property tax exemption statute to match the related constitutional amendment.
The committee voted to oppose legislation that would:
- mandate a reduction in the current ten-percent cap on annual appraisal growth.
- erode the concept that appraisals must reflect the true market value of property.
- impose a revenue cap of any type, including a reduced rollback rate, mandatory tax rate ratification elections, lowered rollback petition requirements, limitations on overall city expenditures, or exclusion of the new property adjustment in effective rate and rollback rate calculations.
- require mailed notice of tax rates.
- impose new property tax exemptions that substantially erode the tax base.
- impose a property tax freeze that can be implemented by any mechanism other than council action.
- remove the authority of a city to collect its own property taxes.
- extend the “Prop 2” pollution control property tax exemption to processes, facilities, or end products.
- impose new mandatory homestead exemptions or exemption increases.
- impose any sales tax exemption that would substantially erode the sales tax base.
- lengthen or broaden the scope of the current sales tax holiday.
- impose a requirement that the adoption of a new sales tax for property tax relief shall result in a lower property tax rollback rate for the adopting city.
- expand the sales tax base without fully benefitting the city tax base.
- impose destination-based sales tax sourcing.
- expand an ESD’s sales tax authority within city limits.
- limit the authority of 4A or 4B sales tax corporations.
- expand election requirements for issuance of any city debt or that would impose a petition/election procedure where none currently exists.
- prevent a city from applying hotel occupancy taxes on the final cost of the hotel room to the guest, or prohibit a city from suing any entity necessary to collect such hotel occupancy taxes.
- cut state appropriations for future local parks grant funding.
- divert sporting goods sales taxes away from use for parks.
- create earmarks of local parks grant funds.
The committee voted to recommend that TML take no position on legislation that would:
- authorize a council-option reduction in the current ten-percent cap on annual appraisal growth.
- impose small property tax exemptions that serve some social good.
- modify the Super Freeport property tax exemption (other than legislation that would match the statute to the constitutional amendment).
- allow a council-option city homestead exemption of up to 30 percent.
- expand or contract eligibility for the CHODO property tax exemption (other than legislation relating to municipal approval of CHODO exemptions).
- broaden the authority of 4A or 4B sales tax corporations.
- align Texas law with the national Streamlined Sales Tax Project (excepting more specific sales tax-related positions taken elsewhere in this legislative program).
In addition, the committee voted to recommend that TML support the adoption of the parks study called for by H.B. 12 (2007), thus binding future legislatures to full local parks funding.
