Truth in Taxation Act
As used in this section:
(1) “Taxing subdivision” means any political subdivision of the state that levies an ad valorem tax on property.
(2) “Revenue neutral rate” means the tax rate for the current tax year that would generate the same property tax revenue as levied the previous tax year using the current tax year’s total assessed valuation. To calculate the revenue neutral rate, the county clerk shall divide the property tax revenue for such taxing subdivision levied for the previous tax year by the total of all taxable assessed valuation in such taxing subdivision for the current tax year, and then multiply the quotient by 1,000 to express the rate in mills. The revenue neutral rate shall be expressed to the third decimal place
Section 1. (a) On or before June 15 each year, the county clerk shall calculate the revenue neutral rate for each taxing subdivision and include such revenue neutral rate on the notice of the estimated assessed valuation provided to each taxing subdivision for budget purposes. The director of accounts and reports shall modify the prescribed budget information form to show the revenue neutral rate.
(b) No tax rate in excess of the revenue neutral rate shall be levied by the governing body of any taxing subdivision unless a resolution or ordinance has been approved by the governing body according to the following procedure:
(1) The governing body shall publish notice of its proposed intent to exceed the revenue neutral rate in the official county newspaper of the county where the taxing subdivision or taxing district is located and on the website of the governing body, if the governing body maintains a website, at least 10 days in advance of the public hearing. The notice shall include, but not be limited to, its proposed tax rate, its revenue neutral rate and the date, time and location of the public hearing.
(2) On or before July 15, the governing body shall notify the county clerk of its proposed intent to exceed the revenue neutral rate and provide the date, time and location of the public hearing and its proposed tax rate. The county clerk shall notify each taxpayer with property in the taxing subdivision or taxing district, by mail directed to the taxpayer’s last known address, of the proposed intent to exceed the revenue rate at least 10 days in advance of the public hearing. Alternatively, the county clerk may transmit the notice to the taxpayer by electronic means at least 10 days in advance of the public hearing, if such taxpayer and county clerk have consented in writing to service by electronic means. Costs associated with the notice shall be borne by the taxing subdivision with payment due to the county clerk by December 31. The county clerk shall consolidate the required information for all taxing subdivisions relevant to the taxpayer’s property on one notice. The notice shall include, but not be limited to:
(A) The revenue neutral rate;
(B) the proposed property tax revenue needed to fund the proposed budget;
(C) the proposed tax rate based upon the proposed budget and the current year’s total assessed valuation;
(D) the tax rate and property tax of the taxing subdivision on the taxpayer’s property from the previous year’s tax statement;
(E) the proposed percent change in the tax rate between the previous year’s tax rate and the proposed tax rate for the current year;
(F) the appraised value and assessed value of the taxpayer’s property for the current year;
(G) the estimates of the tax for the current tax year on the taxpayer’s property based on the revenue neutral rate and the proposed tax rate; and
(H) the date, time and location of the public hearing.
(3) The public hearing to consider exceeding the revenue neutral rate shall be held on or before September 15. The governing body shall provide interested taxpayers desiring to be heard an opportunity to present oral testimony within reasonable time limits and without unreasonable restriction on the number of individuals allowed to make public comment.
(4) A majority vote of the governing body, by the adoption of a resolution or ordinance to approve exceeding the revenue neutral rate, shall be required prior to adoption of a proposed budget that will result in a tax rate in excess of the revenue neutral rate. Such vote of the governing body shall be conducted at the public hearing after the governing body has heard from interested taxpayers.
(c) Any governing body subject to the provisions of this section that does not comply with subsection (b) shall refund to taxpayers any property taxes over-collected based on the amount of the levy that was in excess of the certified tax revenue neutral rate. The provisions of this subsection shall not be construed as prohibiting any other remedies available under the law.
(d) The provisions of subsection (d) shall not apply to school districts organized and operating under the laws of this state.
(e) if the governing body of a taxing subdivision must conduct a public hearing to approve exceeding the revenue neutral rate under this section, the governing body of the taxing subdivision shall certify, on or before September 20, to the proper county clerk the amount of ad valorem tax to be levied.
(f) The provisions of this section shall not apply to any taxing subdivision or taxing district that receives $5,000 or less in revenue from property taxes in the current year.
Adopted by the Tax and Fiscal Policy Task Force on July 16, 2020
Approved by the Board of Directors on August 9, 2020