BILL ANALYSIS H.B. 1884 By: Oakley (Cain) Finance 5-25-95 Senate Committee Report (Unamended) BACKGROUND Section 23.55, Tax Code, imposes an additional tax (rollback tax) on changing the use of land that is designated for agricultural use. If land is changed from agricultural use to some other use, the tax imposed equals the difference between the tax paid, and the tax that would have been paid, with 7 percent interest, if the land had not qualified for special appraisal for the five years preceding the year of change in use. The tax does not apply if the use is changed to timber land, if the owner claims that it is part of a residence homestead, or if it is changed as a result of right-of-way or condemnation, but does apply to a change of use to cemetery use. PURPOSE As proposed, H.B. 1884 exempts land meeting certain criteria that is changed from agricultural use to cemetery use from rollback taxes. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 23.55, Tax Code, by adding Subsections (j) and (k), as follows: (j) Provides that the sanctions provided by Subsection (a) do not apply to a change in the use of land if the land is located in an unincorporated area of a county with a population of less than 10,000; the land does not exceed five acres, the land is owned by a not-for-profit cemetery organization, the cemetery organization dedicates the land for a cemetery purpose; the cemetery organization has not dedicated more than five acres of land in the county for a cemetery purpose in the five years preceding the date the cemetery organization dedicates the land for a cemetery purpose; and the land is adjacent to a cemetery that has been in existence for more than 100 years. (k) Defines "cemetery," "cemetery organization," and "cemetery purpose." SECTION 2. Makes application of this Act prospective. SECTION 3. Emergency clause. Effective date: upon passage.