GEC H.B. 384 75(R)    BILL ANALYSIS


BUSINESS & INDUSTRY
H.B. 384
By: Pitts
4-2-97
Committee Report (Unamended)



BACKGROUND 

Purchases of land have provided nasty surprises for some buyers when tax
statements arrive and they learn that additional ad valorem taxes and
penalties are due.  Current law in Texas does not require a seller of
property provide notice of additional ad valorem tax on a real estate
disclosure form, consequently a buyer may purchase a piece of property
without being aware of the tax liability and penalties. 

PURPOSE

The bill would add a notice of tax liability & penalties written in bold
lettering in a real estate contract for sale of vacant land.  

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS


SECTION 1 Adds section 5.010 to Subchapter A, Chapter 5, property code
which: 
  (a) Requires the owner of a interest in vacant land to include in the
contract of   sale a written notice in boldface type as spelled out in the
legislation. 
  
  (b) This section states that this bill does not apply to contracts for
transfer: 
   (1) under court order
   (2) trustee in bankruptcy
   (3) a mortgagee by a mortgagor
   (4) a foreclosure, court-ordered foreclosure,
deed-in-lieu-of-foreclosure  
   (5) by a fiduciary in administering an estate, guardianship, etc.
   (6) a mineral, leasehold, or security interest
   (7) to or from a government entity

  (c) This section states that this bill does not apply to be given to:
   (1) a co-owner of undivided interest in the property
   (2) a spouse or person in the lineal line of consanguinity

  (d) This section states that this bill is not required if the contract
provides a   separate section for the express purpose of payment for any
additional ad valorem 
   taxes due to change in use.

  (e) This section states that the failure to disclose the information
required under   this bill makes the seller liable for the additional
taxes, penalty and interest. 
  
SECTION 2 Effective date January 1, 1998
 
SECTION 3 Emergency clause.