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.