Can a Texas community college district lower its property tax rate after it has already set it and mailed the bills?

Plain-English summary

The El Paso Community College District set its property tax rate on August 30, 2000, under section 26.05 of the Tax Code. Because the rate was above the rollback rate, the district went through the required notice and hearings, then told the El Paso consolidated tax office, which calculated and mailed the bills. The district later wanted to know whether it could turn around and voluntarily lower its own adopted rate in the same tax year. The Commissioner of Higher Education put the question to the Attorney General.

The opinion concluded the district could not. A taxing unit that is not a home-rule city has only the powers the constitution or statutes expressly grant or that are necessarily implied from those express powers. The Tax Code gives a taxing unit exactly one way to reduce a rate that exceeds the rollback rate: an election under section 26.07, initiated by a valid voter petition filed within ninety days of adoption, signed by at least ten percent of the unit's qualified voters. If the voters approve, the rate drops to the rollback rate, and the statute then spells out how to mail corrected bills, adjust delinquency dates, and refund taxes already paid. No other provision lets a unit reduce its adopted rate, voluntarily or otherwise, and the opinion declined to imply such authority. The reason was practical as much as legal: there is no statutory framework for unwinding the detailed assessment-and-collection process, and building one (corrected bills, new delinquency dates, refunds) is the legislature's job, not the Attorney General's. Because the district lacked statutory authority in the first place, the opinion did not reach the constitutional questions the request had raised. (The opinion noted in a footnote that a rollback petition had in fact been filed here but was one day late and short of the required signatures.)

Currency note

This opinion was issued in 2001. Subsequent statutory amendments, court decisions, or later Attorney General opinions may have changed the analysis. Treat this page as historical context, not current legal advice. The Tax Code's rate-setting and rollback provisions, including the petition deadlines and the rollback formula, have been amended over the years, so verify the current statute before relying on any specific rule, percentage, or deadline here.

What the opinion meant for those who asked

Community college districts and other non-home-rule taxing units (what the opinion held for them): The opinion held that they had no authority to voluntarily reduce an adopted tax rate in the same tax year, and that the only statutory path to lowering a rate above the rollback rate was a timely voter-petition election under section 26.07.

Taxpayers who want a lower rate (what the opinion held for them): The opinion treated the voter-petition rollback election as the exclusive mechanism, with its own deadline, signature threshold, and procedures for corrected bills and refunds.

Tax assessor-collectors (what the opinion held for them): The opinion emphasized that the Code provides an "unwinding" process (corrected bills, adjusted delinquency dates, refunds) only for a petition-driven rollback, not for a voluntary mid-year reduction.

Common questions

Can a Texas taxing unit just lower its property tax rate after setting it?
Under this opinion, no, at least not a community college district or similar non-home-rule unit. The Tax Code does not authorize a voluntary reduction of an adopted rate in the same tax year.

Then how can a tax rate above the rollback rate ever be reduced?
The opinion identified one method: a rollback election under section 26.07, triggered by a valid voter petition filed within ninety days of the rate's adoption and signed by at least ten percent of qualified voters.

Why couldn't the Attorney General just imply the authority?
The opinion explained there is no statutory framework for unwinding the assessment and collection process, so implying the power would require the office to invent procedures for corrected bills, delinquency dates, and refunds, which is the legislature's role.

Background and statutory framework

The Tax Code requires a taxing unit to set an annual tax rate by ordinance, resolution, or order before it may impose property taxes (section 26.05). A unit other than a school district may not adopt a rate exceeding the lower of the rollback rate or 103 percent of the effective rate without a public hearing and compliance with sections 26.06 and 26.065. The rollback rate is calculated under the formula in section 26.04(c). The assessor must mail bills by October 1 or as soon as practicable (section 31.01). A community college (junior college) district is a "special authority," not a school district, for Tax Code purposes (section 1.04(12)). Section 26.07 authorizes a rate reduction only through a petition-initiated election and provides, in subsections (f) and (g), the procedures for corrected bills, adjusted delinquency dates, and refunds when a rate is rolled back after bills are mailed or taxes paid. The opinion applied the rule that non-home-rule taxing units have only expressly granted or necessarily implied powers, citing Tex. Att'y Gen. Op. No. JC-0290 (2000).

Citations

Statutory and constitutional provisions:

• Tex. Tax Code Ann. §§ 1.04(12), 26.04(c), 26.05, 26.06, 26.065, 26.07, 31.01 (Vernon Supp. 2001)
• Tex. Const. art. III, §§ 51, 55

Prior Attorney General opinions:

• Tex. Att'y Gen. Op. Nos. JC-0290 (2000); JM-893 (1988)
• Tex. Att'y Gen. LO-88-116

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/john-cornyn/jc-0360
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2001/jc0360.pdf

Original opinion text

Best-effort transcription from the official scanned PDF. Minor character-level errors from the source OCR have been corrected; the linked PDF is authoritative.

OFFICE OF THE ATTORNEY GENERAL - STATE OF TEXAS

JOHN CORNYN

April 3, 2001

Mr. Don W. Brown
Commissioner of Higher Education
Texas Higher Education Coordinating Board
P.O. Box 12788
Austin, Texas 78711

Opinion No. JC-0360

Re: Whether a community college district may voluntarily reduce its adopted tax rate in the same tax year (RQ-0300-JC)

Dear Commissioner Brown:

You ask whether a community college district may voluntarily reduce its tax rate in the same tax year after adopting the tax rate under section 26.05 of the Tax Code and mailing bills to taxpayers. We conclude that the Tax Code does not expressly authorize a community college district to do so and that the authority may not be implied.

(Footnote: See Letter from Mr. Don W. Brown, Commissioner of Higher Education, Texas Higher Education Coordinating Board, to Honorable John Cornyn, Texas Attorney General, at 1 (Oct. 26, 2000) (on file with Opinion Committee) [hereinafter Request Letter].)

You inform us that the El Paso Community College District ("District") adopted its tax rate on August 30, 2000, under section 26.05 of the Tax Code. See Request Letter, note 1, at 4. Because the tax rate exceeded the rollback rate, the District complied with the notice and hearing requirements of sections 26.05 and 26.06 of the Tax Code. See id. The District has contracted with the City/County of El Paso Consolidated Tax Office for the assessment and collection of its taxes. See id. The District notified that office of the adopted tax rate, and that office calculated and sent bills to taxpayers. See id. The District would like to know whether it is now authorized to voluntarily reduce its tax rate. See id. at 1. We conclude that a district is not so authorized.

To provide a context for your question, we briefly review sections 26.05 and 31.01 of the Tax Code. The Tax Code requires a taxing unit to set an annual tax rate. See TEX. TAX CODE ANN. § 26.05(b) (Vernon Supp. 2001) (stating that a taxing unit may not impose property taxes until the governing body has adopted a tax rate for that year, and the annual tax rate must be set by ordinance, resolution, or order). Subsection 26.05(d) provides that a taxing unit "other than a school district" may not adopt a tax rate that exceeds the lower of the rollback tax rate or 103 percent of the effective tax rate . . . until the governing body" of the taxing unit has conducted a public hearing on the proposed rate and complied with sections 26.06 and 26.065. Id. § 26.05(d) (footnotes added); see also id. § 26.06 (explaining the notice, hearing, and voting procedures on a tax rate increase); id. § 26.065 (mandating notice of a hearing on a tax rate increase). Subsection 26.05(a) directs the governing body of a taxing unit to adopt its tax rate for the current year and notify the tax assessor/collector for the unit of the adopted rate before September 30th or the 60th day after receipt of the certified appraisal roll. See id. § 26.05(a). Under section 31.01 of the Tax Code, the tax assessor must prepare and mail tax bills to property owners by October 1 or as soon as practicable. See id. § 31.01(a).

A taxing unit other than a home-rule city has "only those powers that the constitution or statutes expressly confer or those necessarily implied from the express powers." Tex. Att'y Gen. Op. No. JC-0290 (2000) at 2. The Tax Code expressly authorizes a taxing unit to reduce a tax rate that exceeds the rollback rate by only one method. Section 26.07 of the Tax Code authorizes a taxing unit to amend its tax rate through an election initiated by a valid voter petition. See TEX. TAX CODE ANN. § 26.07 (Vernon Supp. 2001). The petition must be submitted on or before the 90th day after the governing body has adopted the tax rate, signed by at least ten percent of the qualified voters of the taxing unit, and state that its purpose is to require an election on the issue of reducing the current tax rate. See id. § 26.07(b). If a majority of the voters approves reduction of the tax rate at an election called for that purpose, the tax rate is reduced to the rollback rate. See id. § 26.07(e). Significantly, the statute directs the tax assessor and taxing unit about the procedures to be followed if the tax rate is reduced after tax bills have been mailed or taxes paid. See id. § 26.07(f), (g).

(Footnote: We understand that a petition was filed to roll back the taxes at issue, but it was one day late and lacked the requisite signatures. Telephone Interview with Jan Greenberg, General Counsel, Texas Higher Education Coordinating Board (Dec. 18, 2000).)

No other provision in the Tax Code expressly authorizes a taxing unit to reduce its adopted tax rate, voluntarily or otherwise. Moreover, we do not believe that such authority may be implied. While it may be reasonable as a matter of policy for a taxing unit to consider reducing its tax rate voluntarily, there is no statutory framework for "unwinding" the complex and detailed tax assessment and collection procedures. By comparison, subsection (f) of section 26.07 directs the tax-assessor to prepare and mail corrected bills if the tax rate is reduced pursuant to an election. See id. § 26.07(f). It also provides an extension of the delinquency date for the corrected tax liability. See id. Similarly, subsection (g) authorizes and provides a method for refunding taxes paid at the higher tax rate. See id. § 26.07(g). Were this office to infer the authority to voluntarily reduce an adopted tax rate, it would also have to determine a framework for mailing corrected tax bills, adjusting delinquency dates, and refunding taxes paid at the higher rate, among other things. That is not the province of this office but rather of the legislature. Thus, we conclude that absent express statutory authority, a community college district may not voluntarily reduce its adopted tax rate.

Because we determine that a taxing unit lacks statutory authority to voluntarily reduce its adopted tax rate, we do not address the constitutional implications of such action. See Request Letter, supra note 1, at 5-7 (citing Tex. Att'y Gen. Op. No. JM-893 (1988) (concluding that the statutory recreational boat tax exemption applied only to those taxing units that had not certified their tax rolls as of the effective date of the statute consistent with article III, sections 51 and 55 of the Texas Constitution)); Tex. Att'y Gen. LO-88-116, at 1 (concluding that Tex. Att'y Gen. Op. JM-893 would not prevent a city from changing the amount of exemption).

SUMMARY

After adopting a tax rate higher than the rollback rate under section 26.05 of the Tax Code, a community college district may not voluntarily reduce its adopted tax rate in the same tax year. There is no express statutory authority for it to do so, and such authority may not be implied. The only method by which the Tax Code authorizes a community college district to reduce a tax rate that exceeds the rollback rate is an election timely initiated by a valid voter petition.

JOHN CORNYN
Attorney General of Texas

ANDY TAYLOR
First Assistant Attorney General

CLARK KENT ERVIN
Deputy Attorney General - General Counsel

SUSAN D. GUSKY
Chair, Opinion Committee

Polly McCann Pruneda
Assistant Attorney General - Opinion Committee