By Pitts 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.