By Pitts, Rhodes, Gutierrez H.B. No. 384 75R2351 JD-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the disclosure in a contract for the transfer of vacant 1-3 land of certain information, including information concerning the 1-4 imposition of additional taxes on the land. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Subchapter A, Chapter 5, Property Code, is 1-7 amended by adding Section 5.010 to read as follows: 1-8 Sec. 5.010. NOTICE OF ADDITIONAL TAX LIABILITY. (a) A 1-9 person who is the owner of an interest in vacant land and who 1-10 contracts for the transfer of that interest shall include in the 1-11 contract the following bold-faced notice: 1-12 NOTICE REGARDING POSSIBLE LIABILITY FOR ADDITIONAL TAXES 1-13 If for the current ad valorem tax year the taxable value of 1-14 the land that is the subject of this contract is determined by a 1-15 special appraisal method that allows for appraisal of the land at 1-16 less than its market value, the person to whom the land is 1-17 transferred may not be allowed to qualify the land for that special 1-18 appraisal in a subsequent tax year and the land may then be 1-19 appraised at its full market value. In addition, the transfer of 1-20 the land or a subsequent change in the use of the land may result 1-21 in the imposition of an additional tax plus interest as a penalty 1-22 for the transfer or the change in the use of the land. The taxable 1-23 value of the land and the applicable method of appraisal for the 1-24 current tax year is public information and may be obtained from the 2-1 tax appraisal district established for the county in which the land 2-2 is located. 2-3 (b) This section does not apply to a contract for a 2-4 transfer: 2-5 (1) under a court order or foreclosure sale; 2-6 (2) by a trustee in bankruptcy; 2-7 (3) to a mortgagee by a mortgagor or successor in 2-8 interest or to a beneficiary of a deed of trust by a trustor or 2-9 successor in interest; 2-10 (4) by a mortgagee or a beneficiary under a deed of 2-11 trust who has acquired the land at a sale conducted under a power 2-12 of sale under a deed of trust or a sale under a court-ordered 2-13 foreclosure or has acquired the land by a deed in lieu of 2-14 foreclosure; 2-15 (5) by a fiduciary in the course of the administration 2-16 of a decedent's estate, guardianship, conservatorship, or trust; 2-17 (6) of only a mineral interest, leasehold interest, or 2-18 security interest; or 2-19 (7) to or from a governmental entity. 2-20 (c) The notice described by Subsection (a) is not required 2-21 to be included in a contract for transfer of an interest in land if 2-22 every transferee under the contract is: 2-23 (1) a person who is a co-owner with an owner described 2-24 by Subsection (a) of an undivided interest in the land; or 2-25 (2) a spouse or a person in the lineal line of 2-26 consanguinity of an owner described by Subsection (a). 2-27 (d) The notice described by Subsection (a) is not required 3-1 to be given if in a separate paragraph of the contract the contract 3-2 expressly provides for the payment of any additional ad valorem 3-3 taxes and interest that become due as a penalty because of: 3-4 (1) the transfer of the land; or 3-5 (2) a subsequent change in the use of the land. 3-6 (e) If the owner fails to include in the contract the notice 3-7 described by Subsection (a), the person to whom the land is 3-8 transferred is entitled to recover from that owner an amount equal 3-9 to the amount of any additional taxes and interest that the person 3-10 is required to pay as a penalty because of: 3-11 (1) the transfer of the land; or 3-12 (2) a subsequent change in the use of the land that 3-13 occurs before the fifth anniversary of the date of the transfer. 3-14 SECTION 2. This Act takes effect January 1, 1998, and 3-15 applies only to a contract that is executed on or after that date. 3-16 SECTION 3. The importance of this legislation and the 3-17 crowded condition of the calendars in both houses create an 3-18 emergency and an imperative public necessity that the 3-19 constitutional rule requiring bills to be read on three several 3-20 days in each house be suspended, and this rule is hereby suspended.