HB 2607

Present law establishes the duty of county legislative bodies to fix the tax rates on all properties for all county purposes. This bill prohibits a county, municipality, or metropolitan government from levying an ad valorem tax at a level that would ren der in total receipts from all levies an amount more than the receipts from that source from the immediately preceding fiscal year for such county, municipality, metropolitan government, or other taxing jurisdiction, plus an additional 2%. However, any a dd itional revenue from the ad valorem tax on any newly constructed properties or any existing properties added to the tax rolls, that were not assessed in the immediately preceding fiscal year must be excluded from the amount from which the 2% increase is t o be calculated. Further, this bill requires that any taxes levied for the payment of a principal general obligation bond issued prior to July 1, 2026, be excluded from the 2% increase calculation. This bill authorizes a rate and tax levy limitation to be increased above 2% only when a governing body (i) has determined the need for additional revenues; (ii) adopts a resolution or ordinance declaring its intention to adopt a rate that provides for a n increase in ad valorem tax receipts greater than the authorized 2% increase; and (iii) has held a referendum on the question of raising the limitation. This bill clarifies that a tax rate increase above the limitation is limited to a period of four suc ce ssive years or less. REFERENDUM This bill requires the referendum as described above to be held during a regular November election and advertised as required by law. The notice calling for a referendum on raising the tax rate limitation must include the purposes for which the addition al revenues are to be used; the amount of the tax levy to be imposed for such purposes; and the period of time for which the increased rate is to remain in effect. In order for the increased tax rate to become effective, the referendum must be approved b y 60% of those voting in the referendum. Present law authorizes the governing body of any county or municipality to increase a tax rate in excess of the certified tax rate by resolution or ordinance. This bill clarifies that a governing body must comply with the referendum requirement if it se eks to increase an ad valorem tax above the limitations as described above. APPLICABILITY This bill applies to all tax years beginning on or after July 1, 2026.