The House hearing on Senate Bill 2, property tax legislation by Sen. Paul Bettencourt, R-Houston, opened with a warning Wednesday morning. House Ways and Means Chairman Rep. Dennis Bonnen, R-Angleton, cautioned the many people packed into the hearing room to not broach the topic of a five percent rollback tax rate freeze, which was discussed in the Senate's version of the bill.

Instead, Bonnen announced witnesses should focus on the House Committee substitute, which comes with many changes to the initial legislation.

Instead of a 5 percent rollback rate freeze, mandated across all cities, the House substitute limits rollback rates to growing only by inflation plus 3 percent annually. Should taxpayers want to oppose this rate, they would have the option to petition for an election.

Under the House bill, an election would occur automatically if a city's tax rate increase to inflation plus 6 percent. In the bill that gained the Senate's approval, an election would be automatic should the rollback rate exceed 5 percent.

Dick Lavine, Senior Fiscal Analyst with the left-leaning Center for Public Policy Priorities, said the standard to petition is much less than current law requires. The petition requirement needs 10 percent of the number voting in the most recent election for governor.

Bonnen said in the last several years, the inflation rate plus 3 percent was equal to approximately a 5 percent increase, similar to what the Senate's bill would regulate.

Other key changes include renaming the effective tax rate to the "no new revenue" rate and enforcing stricter requirements for notices communicated to property owners.

The name change would show what legislators have been saying for many years — that any tax rate set above the effective tax rate is one that raises new revenue for the jurisdiction.

Notices would be required to include the appraised and taxable value of property, the tax rate due on that property at the jurisdiction's effective tax rate, the jurisdiction's proposed tax due on the property, the difference between the effective tax rate and the proposed tax rate and the date and location of the meeting when the jurisdiction will vote on the tax rate.

To better communicate these details, jurisdictions would be required to maintain websites with all of this information.

While most jurisdictions would be subject to these regulations, some would not. Jurisdictions taking in less than $10 million in property taxes annually for maintenance and operation with a tax rate lower than two cents would not be impacted at all.

Current law would still apply in these areas.

This means that if passed, the House's version of Senate Bill 2 would only apply to 120 total counties, containing 95 percent of Texas' population, or 93 of 1,062 cities with more than half of the state's population.

Local officials remained firm in their testimony against the bill, regardless of the changes.

Frisco Mayor Maher Maso said relying on inflation might create further complications because of the diverse nature of Texas cities.

"[Inflation] is not the same in Frisco...as it is in El Paso," he said.

He also said that in a fast growth city such as Frisco, which is adding 8 to 12 percent population each year and experiencing 8 percent revenue growth, need for greater funding is natural.

He said should the bill pass, the tax rate would likely require annual elections in Frisco, which would lend uncertainty to each annual budget.

"We would have to create two budgets in Frisco because we would not know what our budget was until we had an election," he said.

Lavine said other states have strict property tax laws that require voter approval. He said these laws often make it difficult for cities to set budgets.

Other opponents have focused their opposition based on problems with school finance.

Bonnen refuted this idea by saying the real problem is with confusion in the process.

"The real reality is that I think the taxpayer is completely confused and poorly informed and the process is not easy to follow as to why and how they come to the payment they have to make on taxes every year," Bonnen said. "We can blame it on schools all day long because this is really about the process."

The hearing lasted roughly one hour Wednesday morning and broke for the House to go into session, with Bonnen saying the committee would return many hours later.

The Senate's hearing on Senate Bill 2 lasted several hours and resulted in an early morning vote on the bill.