1-1 By: Pitts (Senate Sponsor - Cain) H.B. No. 947
1-2 (In the Senate - Received from the House April 5, 1995;
1-3 April 6, 1995, read first time and referred to Committee on State
1-4 Affairs; April 25, 1995, reported favorably by the following vote:
1-5 Yeas 13, Nays 0; April 25, 1995, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to loans secured by liens on agricultural-use or
1-9 open-space land.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Subchapter C, Chapter 23, Tax Code, is amended by
1-12 adding Section 23.47 to read as follows:
1-13 Sec. 23.47. LOAN SECURED BY LIEN ON AGRICULTURAL-USE LAND.
1-14 (a) A lender may not require as a condition to granting or
1-15 amending the terms of a loan secured by a lien in favor of the
1-16 lender on land appraised according to this subchapter that the
1-17 borrower waive the right to the appraisal or agree not to apply for
1-18 or receive the appraisal.
1-19 (b) 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 is void to the extent that the
1-22 provision attempts to require the borrower to waive the right to
1-23 the appraisal or to prohibit the borrower from applying for or
1-24 receiving the appraisal.
1-25 (c) A provision in an instrument pertaining to a loan
1-26 secured by a lien in favor of the lender on land appraised
1-27 according to this subchapter that requires the borrower to make a
1-28 payment to protect the lender from loss because of the imposition
1-29 of additional taxes and interest under Section 23.46 is void unless
1-30 the provision:
1-31 (1) requires the borrower to pay into an escrow
1-32 account established by the lender an amount equal to the additional
1-33 taxes and interest that would be due under Section 23.46 if a sale
1-34 or change of use occurred on January 1 of the year in which the
1-35 loan is granted or amended;
1-36 (2) requires the escrow account to bear interest to be
1-37 credited to the account monthly;
1-38 (3) permits the lender to apply money in the escrow
1-39 account to the payment of a bill for additional taxes and interest
1-40 under Section 23.46 before the loan is paid and requires the lender
1-41 to refund the balance remaining in the escrow account after the
1-42 bill is paid to the borrower; and
1-43 (4) requires the lender to refund the money in the
1-44 escrow account to the borrower on the payment of the loan.
1-45 (d) On the request of the borrower or the borrower's
1-46 representative, the assessor for each taxing unit shall compute the
1-47 additional taxes and interest that would be due that taxing unit
1-48 under Section 23.46 if a sale or change of use occurred on January
1-49 1 of the year in which the loan is granted or amended. The
1-50 assessor may charge a reasonable fee not to exceed the actual cost
1-51 of making the computation.
1-52 (e) In this section, "lender" means a lending institution,
1-53 including a bank, trust company, banking association, savings and
1-54 loan association, mortgage company, investment bank, credit union,
1-55 life insurance company, or governmental agency that customarily
1-56 provides financing or an affiliate of any of those entities. The
1-57 term does not include an agency of the United States.
1-58 SECTION 2. Subchapter D, Chapter 23, Tax Code, is amended by
1-59 adding Section 23.58 to read as follows:
1-60 Sec. 23.58. LOAN SECURED BY LIEN ON OPEN-SPACE LAND. (a) A
1-61 lender may not require as a condition to granting or amending the
1-62 terms of a loan secured by a lien in favor of the lender on land
1-63 appraised according to this subchapter that the borrower waive the
1-64 right to the appraisal or agree not to apply for or receive the
1-65 appraisal.
1-66 (b) A provision in an instrument pertaining to a loan
1-67 secured by a lien in favor of the lender on land appraised
1-68 according to this subchapter is void to the extent that the
2-1 provision attempts to require the borrower to waive the right to
2-2 the appraisal or to prohibit the borrower from applying for or
2-3 receiving the appraisal.
2-4 (c) A provision in an instrument pertaining to a loan
2-5 secured by a lien in favor of the lender on land appraised
2-6 according to this subchapter that requires the borrower to make a
2-7 payment to protect the lender from loss because of the imposition
2-8 of additional taxes and interest under Section 23.55 is void unless
2-9 the provision:
2-10 (1) requires the borrower to pay into an escrow
2-11 account established by the lender an amount equal to the additional
2-12 taxes and interest that would be due under Section 23.55 if a
2-13 change of use occurred on January 1 of the year in which the loan
2-14 is granted or amended;
2-15 (2) requires the escrow account to bear interest to be
2-16 credited to the account monthly;
2-17 (3) permits the lender to apply money in the escrow
2-18 account to the payment of a bill for additional taxes and interest
2-19 under Section 23.55 before the loan is paid and requires the lender
2-20 to refund the balance remaining in the escrow account after the
2-21 bill is paid to the borrower; and
2-22 (4) requires the lender to refund the money in the
2-23 escrow account to the borrower on the payment of the loan.
2-24 (d) On the request of the borrower or the borrower's
2-25 representative, the assessor for each taxing unit shall compute the
2-26 additional taxes and interest that would be due that taxing unit
2-27 under Section 23.55 if a change of use occurred on January 1 of the
2-28 year in which the loan is granted or amended. The assessor may
2-29 charge a reasonable fee not to exceed the actual cost of making the
2-30 computation.
2-31 (e) In this section, "lender" has the meaning assigned by
2-32 Section 23.47(e).
2-33 SECTION 3. The importance of this legislation and the
2-34 crowded condition of the calendars in both houses create an
2-35 emergency and an imperative public necessity that the
2-36 constitutional rule requiring bills to be read on three several
2-37 days in each house be suspended, and this rule is hereby suspended,
2-38 and that this Act take effect and be in force from and after its
2-39 passage, and it is so enacted.
2-40 * * * * *