By Pitts H.B. No. 947
74R424 SMH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to loans secured by liens on agricultural or open-space
1-3 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 LAND. (a)
1-8 A lender may not require as a condition to granting or amending the
1-9 terms of a loan secured by a lien in favor of the lender on land
1-10 appraised according to this subchapter that the borrower waive the
1-11 right to the appraisal or agree not to apply for or receive the
1-12 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, the assessor for each
2-16 taxing unit shall compute the additional taxes and interest that
2-17 would be due that taxing unit under Section 23.46 if a sale or
2-18 change of use occurred on January 1 of the year in which the loan
2-19 is granted or amended. The assessor may charge a reasonable fee
2-20 not to exceed the actual cost of making the computation.
2-21 (e) In this section, "lender" means a lending institution,
2-22 including a bank, trust company, banking association, savings and
2-23 loan association, mortgage company, investment bank, credit union,
2-24 life insurance company, or governmental agency that customarily
2-25 provides financing or an affiliate of any of those entities. The
2-26 term does not include an agency of the United States.
2-27 SECTION 2. Subchapter D, Chapter 23, Tax Code, is amended by
3-1 adding Section 23.58 to read as follows:
3-2 Sec. 23.58. LOAN SECURED BY LIEN ON OPEN-SPACE LAND. (a) A
3-3 lender may not require as a condition to granting or amending the
3-4 terms of a loan secured by a lien in favor of the lender on land
3-5 appraised according to this subchapter that the borrower waive the
3-6 right to the appraisal or agree not to apply for or receive the
3-7 appraisal.
3-8 (b) A provision in an instrument pertaining to a loan
3-9 secured by a lien in favor of the lender on land appraised
3-10 according to this subchapter is void to the extent that the
3-11 provision attempts to require the borrower to waive the right to
3-12 the appraisal or to prohibit the borrower from applying for or
3-13 receiving the appraisal.
3-14 (c) A provision in an instrument pertaining to a loan
3-15 secured by a lien in favor of the lender on land appraised
3-16 according to this subchapter that requires the borrower to make a
3-17 payment to protect the lender from loss because of the imposition
3-18 of additional taxes and interest under Section 23.55 is void unless
3-19 the provision:
3-20 (1) requires the borrower to pay into an escrow
3-21 account established by the lender an amount equal to the additional
3-22 taxes and interest that would be due under Section 23.55 if a
3-23 change of use occurred on January 1 of the year in which the loan
3-24 is granted or amended;
3-25 (2) requires the escrow account to bear interest to be
3-26 credited to the account monthly;
3-27 (3) permits the lender to apply money in the escrow
4-1 account to the payment of a bill for additional taxes and interest
4-2 under Section 23.55 before the loan is paid and requires the lender
4-3 to refund the balance remaining in the escrow account after the
4-4 bill is paid to the borrower; and
4-5 (4) requires the lender to refund the money in the
4-6 escrow account to the borrower on the payment of the loan.
4-7 (d) On the request of the borrower, the assessor for each
4-8 taxing unit shall compute the additional taxes and interest that
4-9 would be due that taxing unit under Section 23.55 if a change of
4-10 use occurred on January 1 of the year in which the loan is granted
4-11 or amended. The assessor may charge a reasonable fee not to exceed
4-12 the actual cost of making the computation.
4-13 (e) In this section, "lender" has the meaning assigned by
4-14 Section 23.47(e).
4-15 SECTION 3. The importance of this legislation and the
4-16 crowded condition of the calendars in both houses create an
4-17 emergency and an imperative public necessity that the
4-18 constitutional rule requiring bills to be read on three several
4-19 days in each house be suspended, and this rule is hereby suspended,
4-20 and that this Act take effect and be in force from and after its
4-21 passage, and it is so enacted.