Floor Packet Page No. 358
Amend CSHB 4 by deleting Article 21 in its entirety and
inserting the following:
ARTICLE 21. RESIDENTIAL TENANT'S TAX RELIEF
SECTION 21.01. Title 1, Tax Code, is amended by adding
Chapter 51 to read as follows:
CHAPTER 51. PROPERTY TAX RELIEF FOR RESIDENTIAL TENANTS
Sec. 51.001. TAX SAVINGS FOR RESIDENTIAL TENANTS. To ensure
that residential rental tenants receive direct and immediate
benefit from the reduction in local ad valorem school taxes until
the benefit of such tax relief is fully reflected in rental rates
through free market competition, every residential landlord shall
have the option of giving a monthly rent credit or rebate to
tenants who are renting a residential dwelling unit in this state
between January 1, 1998 and December 31, 1999.
Sec. 51.002. DEFINITIONS. In this chapter:
(1) "Landlord" means the owner, lessor, or sublessor of
a dwelling, but does not include a manager or agent of the landlord
unless the manager or agent purports to be the owner, lessor, or
sublessor in a written or oral lease.
(2) "Lease" means a written or oral agreement between a
landlord and tenant that establishes or modifies the terms,
condition, rules, or other provisions regarding the use and
occupancy or a dwelling.
(3) "Multifamily rental dwelling project" means any
multiunit rental project with two or more rental dwelling units,
including: duplexes, apartments, dormitories, manufactured housing
communities, and all other multiunit rental housing subject to
local school ad valorem taxes.
(4) "Rent" includes the total amount charged by a
landlord, or by another person on the landlord's behalf, for the
use and occupancy of a dwelling unit, not including refundable
security deposits.
(5) "Rental dwelling unit" means one or more rooms
rented for use as a permanent residence under a single lease to one
or more tenants.
(6) "Tenant" means an individual who is authorized by a
lease to occupy a dwelling to the exclusion of others and is
obligated under the lease to pay rent.
Sec. 51.003. CREDIT OR REBATE TO TENANT OF LANDLORD'S
PROPERTY TAX SAVINGS. A landlord is obligated to provide a tenant
with a monthly credit or rebate on rents to reflect a portion of
the landlord's local ad valorem school tax savings for 1997 and
1998, as provided by this chapter.
Sec. 51.004. APPLICATION. (a) This chapter applies only to a
dwelling unit or multifamily rental dwelling project that is
subject to the local ad valorem school tax.
(b) This chapter does not apply to a temporary residential
tenancy created by a contract of sale in which the buyer occupies
the property before closing or the seller occupies the property
after closing for a term not to exceed 90 days.
Sec. 51.005. NOTICE BY CENTRAL APPRAISAL DISTRICTS. (a) On or
before October 1, 1997, or as soon thereafter as practicable, each
central appraisal district shall send all residential property
owners a notice describing the requirements of this chapter. The
notice shall contain language substantially similar to the
following:
"Due to the property tax relief law passed by the 1997 Texas
Legislature, residential landlords are required to pass local ad
valorem school tax savings along to residential tenants for all
leases in effect as of January 1, 1998 and for all leases entered
into in 1998 and 1999. These savings must be provided to tenants
by giving a monthly rent credit or rebate equal to the amount of
property tax savings on school property taxes. Failure to comply
with this law could result in severe penalties, including a civil
penalty of $100, treble damages and attorney's fees. Information
on complying with this law is available by contacting the (insert
name, address and phone number of local central appraisal district)
or by contacting the Texas Comptroller of Public Accounts by
calling 1-800/252-5555."
(b) The notice required under Subsection (a) may be sent to
property owners as part of another communication sent by the
appraisal district in accordance with Section 31.01, Tax Code and
does not have to be sent to property owners in the form of a
separate communication.
(c) The central appraisal district shall place at least one
advertisement monthly in a newspaper of general circulation in the
county in which the central appraisal district is located during
the months of November and December, 1997. The advertisement shall
be in 14-point type or larger and contain language substantially
similar to the language in Subsection (a) of this section.
Sec. 51.006. TECHNICAL ASSISTANCE BY COMPTROLLER OF PUBLIC
ACCOUNTS. (a) Not later than September 1, 1997, the comptroller
shall develop materials in plain language to assist landlords in
complying with this chapter. Such information shall also be made
available in Spanish. Copies of this information shall be sent to
all central appraisal districts on or before September 15, 1997 and
shall also be provided without cost to property owners who contact
the comptroller.
(b) The comptroller shall also provide any technical
assistance necessary to assist central appraisal districts and
landlords in complying with this chapter.
Sec. 51.007. TAX SAVINGS CALCULATIONS BY LANDLORDS. (a) A
landlord shall determine the monthly local ad valorem school tax
savings due to a tenant through a rent credit or rebate as follows:
(1) The monthly rent credit or rebate for a single
family rental dwelling unit shall be equal to one-twelfth of the
total difference between the local ad valorem school taxes for the
dwelling unit for the previous year as compared to the taxes that
would have been charged on the unit for the previous year if the
unit had been taxed under the state ad valorem tax.
(2) The monthly rent credit or rebate for a rental
dwelling unit in a multifamily rental dwelling project shall be
equal to one-twelfth of the total difference between the local ad
valorem school taxes for the multifamily dwelling project for the
previous year as compared to the taxes that would have been charged
on the unit for the previous year if the unit had been taxed under
the state ad valorem tax, times the square footage in the tenant's
dwelling unit, divided by the total net rentable square footage of
all rental dwelling units in the multifamily rental dwelling
project.
(b) The rent credit or rebate calculated under Subsection
(a) shall be on a per-dwelling-unit basis and not on a per-tenant
basis.
Sec. 51.008. DATE OF REQUIRED CREDIT OR REBATE. (a) If a
landlord gives a monthly credit to a tenant under this chapter, the
landlord shall give the credit on the due date for each month's
rent.
(b) If a landlord pays a monthly rent rebate to the tenant,
the landlord shall pay the rebate no later than 10 days after the
tenant pays the entire rent due for the month. A landlord is
presumed to have timely paid a rebate if the rebate is placed in
the United States mail and postmarked on or before that date.
(c) If the rent is paid weekly, the credit or rebate shall
equal 1/52 of the credit or rebate for the entire year.
Sec. 51.009. NOTICE TO TENANTS. (a) If a landlord and
tenant entered into a lease prior to January 1, 1998, the landlord
shall provide a notice to the tenant on or before January 5, 1998.
The notice shall be in bold-faced, 14-point type or larger and
state substantially the following:
"NOTICE OF TAX SAVINGS ON RENT
Your current monthly rent on (insert unit number or street
adress) is $ (insert amount of rent). Due to the
property tax relief law passed by the 1997 Texas Legislature, the
school property taxes for your dwelling unit have been reduced by
(insert percentage savings) % for 1998 (or 1999). The property tax
relief law provides that the property owner must pass along these
tax savings to you and other tenants until sufficient time has
elapsed for the tax relief to be fully reflected in rental rates
through free market competition.
Accordingly, you will receive a rent credit (or rebate check)
of $ (insert monthly prorated amount) for the current month of
January and for each month thereafter, until the expiration of your
current lease or December 31, 1999, whichever date is first. The
cumulative amount of property tax savings that will be passed on to
you during the term of your lease as a result of the 1997 property
tax relief legislation is $ (insert cumulative savings for the unit
for the term of the lease).
This means the net rent you will be paying for this month and
each subsequent month under your current lease will be $ (insert
net rent rate). You will also be entitled to a rent credit or
rebate if you enter into a new lease for any rental dwelling unit
in Texas anytime in 1998 or 1999, through the expiration of your
lease term or December 31, 1999, whichever date is first.
If you have any questions about this new law, please contact
the local appraisal district at (insert address and phone number of
local appraisal district)."
(b) If a landlord and tenant enter into a lease after
January 1, 1998 and before December 31, 1999, the landlord shall
provide a notice to the tenant at the time of signing the lease.
The notice shall be in boldfaced, 14-point type or larger and shall
state substantially the following:
"NOTICE OF TAX SAVINGS ON RENT
The monthly rent on (insert unit number or street address or
dwelling unit) is $ (insert amount of rent).
Due to the property tax relief law passed by the 1997 Texas
Legislature, the school property taxes for your dwelling unit have
been reduced by (insert percentage savings) % for 1998 (or 1999).
The property tax relief law provides that the property owner must
pass along these tax savings to you and other tenants until
sufficient time has elapsed for the tax relief to be fully
reflected in rental rates through free market competition.
Accordingly, you will receive a rent credit (or rebate check)
of $ (insert monthly prorated amount) for the first month of your
lease and for each month thereafter, until the expiration of your
current lease or December 31, 1999, whichever date is first. The
cumulative amount of property tax savings that will be passed on to
you during the term of your lease as a result of the 1997 property
tax relief legislation is $ (insert cumulative savings for the unit
for the term of the lease).
This means the net rent you will be paying for this month and
each subsequent month under your current lease will be $ (insert
net rent rate). You will also be entitled to a rent credit or
rebate if you enter into a new lease for any rental dwelling unit
in Texas anytime in 1998 or 1999, through the expiration of your
lease term or December 31, 1999, whichever date is first.
If you have any questions about this new law, please contact
the local appraisal district at (insert address and phone number of
local appraisal district)."
Sec. 51.010. CREDIT OR REBATE FOR MULTIPLE TENANTS. If
there are two or more tenants liable under a lease for the same
rental dwelling unit, the credit or rebate shall be provided
jointly to all tenants renting the dwelling.
Sec. 51.011 PENALTIES. (a) If a landlord fails to comply
with this chapter, the landlord shall be liable to the tenant for a
civil penalty of $100 and treble the amount of any rent credit or
rebate not provided to the tenant. In any litigation involving a
rent credit or rebate, the prevailing party shall recover
reasonable attorney's fees from the non-prevailing party.
Sec. 51.012. TAX APPRAISALS. For the calendar years 1997,
1998 and 1999, no state or local taxing authority may consider the
reduction of local ad valorem school taxes resulting from this
chapter in any valuation leading to an increase in the appraised
value of a residential rental dwelling unit or a multifamily rental
dwelling project.
Sec. 51.013. EXPIRATION DATE. This chapter expires January
1, 2000.