74R8292 SMH-D
By Pitts H.B. No. 947
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to loans secured by liens on agricultural-use or
1-3 open-space land.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter C, Chapter 23, Tax Code, is amended by
1-6 adding Section 23.47 to read as follows:
1-7 Sec. 23.47. LOAN SECURED BY LIEN ON AGRICULTURAL-USE LAND.
1-8 (a) A lender may not require as a condition to granting or
1-9 amending the terms of a loan secured by a lien in favor of the
1-10 lender on land appraised according to this subchapter that the
1-11 borrower waive the right to the appraisal or agree not to apply for
1-12 or receive the appraisal.
1-13 (b) A provision in an instrument pertaining to a loan
1-14 secured by a lien in favor of the lender on land appraised
1-15 according to this subchapter is void to the extent that the
1-16 provision attempts to require the borrower to waive the right to
1-17 the appraisal or to prohibit the borrower from applying for or
1-18 receiving the appraisal.
1-19 (c) A provision in an instrument pertaining to a loan
1-20 secured by a lien in favor of the lender on land appraised
1-21 according to this subchapter that requires the borrower to make a
1-22 payment to protect the lender from loss because of the imposition
1-23 of additional taxes and interest under Section 23.46 is void unless
1-24 the provision:
2-1 (1) requires the borrower to pay into an escrow
2-2 account established by the lender an amount equal to the additional
2-3 taxes and interest that would be due under Section 23.46 if a sale
2-4 or change of use occurred on January 1 of the year in which the
2-5 loan is granted or amended;
2-6 (2) requires the escrow account to bear interest to be
2-7 credited to the account monthly;
2-8 (3) permits the lender to apply money in the escrow
2-9 account to the payment of a bill for additional taxes and interest
2-10 under Section 23.46 before the loan is paid and requires the lender
2-11 to refund the balance remaining in the escrow account after the
2-12 bill is paid to the borrower; and
2-13 (4) requires the lender to refund the money in the
2-14 escrow account to the borrower on the payment of the loan.
2-15 (d) On the request of the borrower or the borrower's
2-16 representative, the assessor for each taxing unit shall compute the
2-17 additional taxes and interest that would be due that taxing unit
2-18 under Section 23.46 if a sale or change of use occurred on January
2-19 1 of the year in which the loan is granted or amended. The
2-20 assessor may charge a reasonable fee not to exceed the actual cost
2-21 of making the computation.
2-22 (e) In this section, "lender" means a lending institution,
2-23 including a bank, trust company, banking association, savings and
2-24 loan association, mortgage company, investment bank, credit union,
2-25 life insurance company, or governmental agency that customarily
2-26 provides financing or an affiliate of any of those entities. The
2-27 term does not include an agency of the United States.
3-1 SECTION 2. Subchapter D, Chapter 23, Tax Code, is amended by
3-2 adding Section 23.58 to read as follows:
3-3 Sec. 23.58. LOAN SECURED BY LIEN ON OPEN-SPACE LAND. (a) A
3-4 lender may not require as a condition to granting or amending the
3-5 terms of a loan secured by a lien in favor of the lender on land
3-6 appraised according to this subchapter that the borrower waive the
3-7 right to the appraisal or agree not to apply for or receive the
3-8 appraisal.
3-9 (b) A provision in an instrument pertaining to a loan
3-10 secured by a lien in favor of the lender on land appraised
3-11 according to this subchapter is void to the extent that the
3-12 provision attempts to require the borrower to waive the right to
3-13 the appraisal or to prohibit the borrower from applying for or
3-14 receiving the appraisal.
3-15 (c) A provision in an instrument pertaining to a loan
3-16 secured by a lien in favor of the lender on land appraised
3-17 according to this subchapter that requires the borrower to make a
3-18 payment to protect the lender from loss because of the imposition
3-19 of additional taxes and interest under Section 23.55 is void unless
3-20 the provision:
3-21 (1) requires the borrower to pay into an escrow
3-22 account established by the lender an amount equal to the additional
3-23 taxes and interest that would be due under Section 23.55 if a
3-24 change of use occurred on January 1 of the year in which the loan
3-25 is granted or amended;
3-26 (2) requires the escrow account to bear interest to be
3-27 credited to the account monthly;
4-1 (3) permits the lender to apply money in the escrow
4-2 account to the payment of a bill for additional taxes and interest
4-3 under Section 23.55 before the loan is paid and requires the lender
4-4 to refund the balance remaining in the escrow account after the
4-5 bill is paid to the borrower; and
4-6 (4) requires the lender to refund the money in the
4-7 escrow account to the borrower on the payment of the loan.
4-8 (d) On the request of the borrower or the borrower's
4-9 representative, the assessor for each taxing unit shall compute the
4-10 additional taxes and interest that would be due that taxing unit
4-11 under Section 23.55 if a change of use occurred on January 1 of the
4-12 year in which the loan is granted or amended. The assessor may
4-13 charge a reasonable fee not to exceed the actual cost of making the
4-14 computation.
4-15 (e) In this section, "lender" has the meaning assigned by
4-16 Section 23.47(e).
4-17 SECTION 3. The importance of this legislation and the
4-18 crowded condition of the calendars in both houses create an
4-19 emergency and an imperative public necessity that the
4-20 constitutional rule requiring bills to be read on three several
4-21 days in each house be suspended, and this rule is hereby suspended,
4-22 and that this Act take effect and be in force from and after its
4-23 passage, and it is so enacted.