Can a Texas school district use an estimated property value to set its tax rate after adopting its budget?

Plain-English summary

Michael Williams, the Commissioner of Education, asked the Attorney General about the order in which a school district adopts its budget and its tax rate, and how that interacts with scheduling a tax ratification election (a TRE). Each year a school district's board of trustees adopts a budget and a tax rate, and if the adopted rate tops the district's rollback rate, the voters have to approve it at a TRE. The usual process requires the district to calculate the proposed rate using the chief appraiser's certified appraisal roll, which the law requires by July 25. The problem the Commissioner described was that the Harris County Appraisal District did not expect to deliver the certified roll until the last week of August, too late to get a TRE onto the November uniform election date.

The law offers an alternative. A district may use a certified estimate of property values, instead of the final appraisal roll, but only under a specific provision: section 26.05(g) of the Tax Code lets a district that elects to adopt its tax rate before adopting its budget use the certified estimate. The Commissioner asked whether a district could instead adopt its budget first, then use the certified estimate to adopt its tax rate, relying on section 44.004(j) of the Education Code as a separate source of authority.

The AG concluded that section 44.004(j) does not give that authority. By its plain terms, section 44.004(j) only lets a district adopt its budget after its tax rate when the district is operating "as provided by Section 26.05(g)," which is the rate-first path. A district that did not elect to adopt its rate before its budget is not operating under 26.05(g), so it cannot use the certified estimate, and it must fall back on the general rule requiring the final certified appraisal roll. The AG also rejected the Commissioner's policy argument that the broader statutory scheme favors uniform election dates. The primary job in reading a statute is to follow its plain language, and here the Legislature had expressly made the uniform-date requirement apply to some TREs and not others, so the AG found no general policy it could use to override the text. If the Legislature wanted to promote uniform-date TREs, the opinion said, it had the power to change the statute.

Currency note

This opinion was issued in 2015. 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. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

School districts (as the opinion described it): The opinion described the certified-estimate shortcut as available only to a district that elects to adopt its tax rate before its budget under section 26.05(g). It described a district that adopts its budget first as bound by the general rule requiring the final certified appraisal roll to set the tax rate.

The Commissioner of Education and the Texas Education Agency (as the opinion described it): The opinion treated section 44.004(j) of the Education Code as a provision that depends on section 26.05(g), not an independent grant of authority, so it answered the Commissioner's question with a no.

Anyone scheduling a tax ratification election (as the opinion described it): The opinion explained that the result could force a TRE onto a date other than the November uniform date, and that this outcome was consistent with the statute, because the Legislature had made the uniform-date requirement apply to TREs only when a uniform date falls within the 30-to-90-day window after a higher rate is adopted.

The Legislature (as the opinion described it): The opinion noted that if lawmakers wanted to promote holding TREs on uniform election dates, they had the power to amend the statutory scheme, but the AG would not read that preference into the text as written.

Common questions

Can a school district use an estimated property value instead of the final appraisal roll to set its tax rate?
The AG concluded only if the district elects to adopt its tax rate before its budget, under section 26.05(g) of the Tax Code. A district that adopts its budget first does not qualify for that shortcut.

Does adopting the budget first or the tax rate first matter?
Yes. The AG explained the certified-estimate option is tied to the rate-first sequence. A district operating in the usual budget-first order has to use the final certified appraisal roll.

Does section 44.004(j) of the Education Code give districts a separate way to use the estimate?
The AG concluded no. It read section 44.004(j) as only allowing a budget-after-rate sequence for a district already operating under section 26.05(g) of the Tax Code, not as an independent source of authority.

Why couldn't the district just use the estimate to hit the November election date?
The AG declined to bend the statute toward uniform election dates. It explained the Legislature itself made the uniform-date requirement apply to some tax ratification elections and not others, so there was no general policy favoring uniform dates that could override the plain text.

What happens if the appraisal roll arrives too late for the November date?
The opinion acknowledged the result could require holding the TRE on a different date, and treated that as the consequence the statute produced, noting the Legislature could change the scheme if it wanted a different outcome.

Background and statutory framework

Each year a school district's board of trustees must adopt a budget and a tax rate for the coming fiscal year (Tex. Educ. Code Ann. § 44.004 (West 2012); Tex. Tax Code Ann. § 26.05 (West Supp. 2014)). A rate above the rollback rate must be ratified by the voters at a TRE (Tex. Tax Code Ann. § 26.08(a) (West Supp. 2014)), and the timing rules in section 26.08(b) make the Election Code's uniform-date requirement apply only when a uniform date falls within the 30-to-90-day window after the higher rate is adopted (Tex. Tax Code Ann. § 26.08(b) (West Supp. 2014); Tex. Elec. Code Ann. § 41.001(a), (b)(6) (West Supp. 2014)).

The traditional process requires the district to use the chief appraiser's certified appraisal roll, due by July 25, to calculate the proposed rate (Tex. Tax Code Ann. §§ 26.01(a), 26.05(a) (West Supp. 2014)). As an exception, a district that elects to adopt its tax rate before adopting its budget may use a certified estimate of taxable value rather than the final roll (Tex. Tax Code Ann. § 26.05(g) (West Supp. 2014); see also id. § 26.01(e); Tex. Educ. Code Ann. § 44.004(h) (West 2012)). Section 44.004(j) of the Education Code permits such a district to adopt its budget after its tax rate, but only when it is operating "as provided by Section 26.05(g), Tax Code" (Tex. Educ. Code Ann. § 44.004(j) (West 2012)); the general rule otherwise requires the budget before the tax rate and the use of the certified appraisal roll (id. § 44.004(g); Tex. Tax Code Ann. § 26.05(a) (West Supp. 2014)).

The AG applied the rule that statutory construction follows the plain language the Legislature deliberately chose (Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012)), and declined to read a generalized uniform-election-date policy into the statute where the text did not supply one.

Citations

Statutory provisions:

• Tex. Educ. Code Ann. § 44.004, § 44.004(g), (h), (j) (West 2012) (school district budget and tax rate adoption)
• Tex. Tax Code Ann. § 26.05, § 26.05(a), (g) (West Supp. 2014) (tax rate adoption; certified estimate exception)
• Tex. Tax Code Ann. § 26.01(a), (e) (West Supp. 2014) (certified appraisal roll; certified estimate)
• Tex. Tax Code Ann. § 26.08(a), (b) (West Supp. 2014) (tax ratification election and its timing)
• Tex. Elec. Code Ann. § 41.001(a), (b)(6) (West Supp. 2014) (uniform election date requirement and exceptions)

Cases:

• Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 452 (Tex. 2012)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0001
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2015/kp0001.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

January 20, 2015

Mr. Michael Williams Opinion No. KP-0001
Commissioner of Education
Texas Education Agency Re: Whether an independent school district
1701 North Congress Avenue may use the certified estimate of property tax
Austin, Texas 78701-1494 values to adopt a tax rate after adopting its
budget (RQ-1211-GA)

Dear Commissioner Williams:

Your question concerns "the adoption of a school district's budget and tax rate and the scheduling of tax ratification elections ('TRE's)." [1] Each year, the board of trustees of an independent school district must adopt a budget and a tax rate for the next fiscal year. See generally TEX. EDUC. CODE ANN. § 44.004 (West 2012); TEX. TAX CODE ANN. § 26.05 (West Supp. 2014). If a school district adopts a tax rate that exceeds its rollback rate, the adopted rate must be approved by the district's voters through a TRE. TEX. TAX CODE ANN. § 26.08(a) (West Supp. 2014). In a traditional tax rate adoption process, a school district must use the chief appraiser's certified appraisal roll, which by law must be certified by July 25, in order to calculate the proposed tax rate. Id. §§ 26.01(a), .05(a). You tell us, however, that "this year the Harris County Appraisal District does not expect to provide the certified appraisal roll to school districts until the last week in August," which precludes the use of the traditional tax timetable to schedule the TRE in time for the election to occur in conjunction with the November uniform election date. [2] Request Letter at 3.

Both the Tax Code and the Education Code contemplate an alternative process in which school districts may use a certified estimate of property tax values, rather than the final certified appraisal roll, to calculate the proposed tax rate. See TEX. EDUC. CODE ANN. § 44.004(h) (West 2012); TEX. TAX CODE ANN. § 26.01(e) (West Supp. 2014). You ask specifically about subsection 44.004(j) of the Education Code, which provides in pertinent part:

Notwithstanding Subsections (g), (h), and (i), a school district may adopt a budget after the district adopts a tax rate for the tax year in which the fiscal year covered by the budget begins if the district elects to adopt a tax rate before receiving the certified appraisal roll for the district as provided by Section 26.05(g), Tax Code.

TEX. EDUC. CODE ANN. § 44.004(j) (West 2012). Also directly relevant to your question is subsection 26.05(g) of the Tax Code, which provides:

Notwithstanding Subsection (a), the governing body of a school district that elects to adopt a tax rate before the adoption of a budget for the fiscal year that begins in the current tax year may adopt a tax rate for the current tax year before receipt of the certified appraisal roll for the school district if the chief appraiser of the appraisal district . . . has certified to the assessor for the school district an estimate of the taxable value of property in the school district as provided by Section 26.01(e). If a school district adopts a tax rate under this subsection, the effective tax rate and the rollback tax rate of the district shall be calculated based on the certified estimate of taxable value.

TEX. TAX CODE ANN. § 26.05(g) (West Supp. 2014). You ask whether a school district is authorized to use the certified estimate to "adopt a tax rate after adopting its budget in order to schedule a tax ratification election for the November uniform election date." Request Letter at 3.

Generally, a school district's "budget must be adopted before the adoption of the tax rate for the tax year in which the fiscal year covered by the budget begins" and the school district must use the certified appraisal roll in adopting the tax rate. TEX. EDUC. CODE ANN. § 44.004(g) (West 2012) (emphasis added); see also TEX. TAX CODE ANN. § 26.05(a) (West Supp. 2014) (generally requiring school districts to use the certified appraisal roll in adopting the tax rate and in calculating the rollback rate). Subsection 26.05(g) operates as an exception to the general rules requiring use of the certified appraisal roll and adoption of a budget before adoption of a tax rate. It authorizes a district that "elects to adopt a tax rate before the adoption of a budget" to use a certified estimate rather than the final, certified appraisal roll. TEX. TAX CODE ANN. § 26.05(g) (West Supp. 2014). Districts that do not "elect[] to adopt a tax rate before the adoption of a budget" are not authorized by subsection 26.05(g) to use a certified estimate. Id.

You suggest that subsection 44.004(j) of the Education Code provides an independent source of authority under which a school district adopting a tax rate after adoption of a budget could use the certified estimate rather than the certified appraisal roll. Request Letter at 3-4. The plain language of that provision, however, merely authorizes districts operating "as provided by Section 26.05(g), Tax Code," to "adopt a budget after the district adopts a tax rate." TEX. EDUC. CODE ANN. § 44.004(j) (West 2012). In other words, a district must be employing subsection 26.05(g) of the Tax Code in order to make use of subsection 44.004(j)'s grant of authority to adopt a budget after adopting a tax rate. Subsection 44.004(j) does not authorize a district not already operating under subsection 26.05(g) of the Tax Code to use the certified estimate, regardless of the sequence in which the district adopts its budget and tax rate. You point to no other potential source of authority under which a school district could adopt a tax rate using a certified estimate rather than the certified appraisal roll. You suggest that the districts about which you ask have not elected to adopt a tax rate before adoption of a budget. Request Letter at 3. A district that has not elected to operate under the authority of subsection 26.05(g) of the Tax Code would lack authority to depart from the general rule requiring use of the certified appraisal roll to adopt a tax rate. See TEX. TAX CODE ANN. § 26.05(a) (West Supp. 2014).

You claim that this conclusion may result in a school district having to hold a TRE on a date other than the November general election date. See Request Letter at 3. You suggest that this result is contrary to the "larger statutory scheme adopted by the legislature that favors uniform election dates over special elections." Id. at 2. The primary goal in statutory construction, however, is to determine and give effect to legislative intent as expressed by the plain language of the statute, which is presumed to have been deliberately and purposefully selected by the Legislature. Tex. Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 452 (Tex. 2012). We decline to depart from the plain meaning of the text chosen by the Legislature out of a concern for generalized policy goals not contained in the text. In any event, it is not the case that the statutory scheme favors uniform election dates in all situations. The Legislature has expressly provided that the requirement of uniform election dates in subsection 41.001(a) of the Election Code "does not apply" to a number of elections, including "an election held under a statute that expressly provides that the requirement of Subsection (a) does not apply to the election." TEX. ELEC. CODE ANN. § 41.001(a), (b)(6) (West Supp. 2014). Subsection 26.08(b) of the Tax Code, governing the timing of a TRE, expressly provides that "[s]ection 41.001, Election Code, does not apply to the election unless a date specified by that section falls within" a 30- to 90-day time period following the adoption of a higher tax rate. TEX. TAX CODE ANN. § 26.08(b) (West Supp. 2014) (emphasis added). Thus, the Legislature has decided to make the requirement that a TRE be held on a uniform election date applicable under some circumstances and not others. From these statutory provisions, we can discern no general legislative policy favoring uniform election dates for TREs. And in any event, the method of adopting a tax rate you suggest is not found in the applicable statutes. If the Legislature wishes to change this statutory scheme to promote the holding of TREs on uniform election dates, it of course has the power to do so.

SUMMARY

Subsections 44.004(j) of the Education Code and 26.05(g) of the Tax Code do not authorize an independent school district to use the certified estimate of property tax values to adopt a tax rate after adopting its budget.

Very truly yours,

KEN PAXTON
Attorney General of Texas

CHARLES E. ROY
First Assistant Attorney General

BRANTLEY STARR
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

BECKY P. CASARES
Assistant Attorney General, Opinion Committee

[1] Letter from Mr. Michael Williams, Comm'r of Educ., Tex. Educ. Agency, to Hon. Greg Abbott, Tex. Att'y Gen. at 1 (July 9, 2014), http://www.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").

[2] A TRE must be held between 30 and 90 days after the adoption of a higher tax rate. TEX. TAX CODE ANN. § 26.08(b) (West Supp. 2014). If the November uniform election date falls within this time period, the TRE must be held on the uniform election date. Id.; see also TEX. ELEC. CODE ANN. § 41.001(b)(6) (West Supp. 2014). If the uniform election date falls outside the window, a TRE is conducted on a different election date. TEX. TAX CODE ANN. § 26.08(b) (West Supp. 2014).