By Haywood S.B. No. 1481
76R562 JD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the appraisal of agricultural land for ad valorem
1-3 taxation.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 23.46(c) and (d), Tax Code, are amended
1-6 to read as follows:
1-7 (c) If land that has been designated for agricultural use in
1-8 any year is sold or diverted to a nonagricultural use, the total
1-9 amount of additional taxes for the three years preceding the year
1-10 in which the land is sold or diverted [plus interest at the rate
1-11 provided for delinquent taxes] becomes due. A determination that
1-12 the land has been diverted to a nonagricultural use is made by the
1-13 chief appraiser. For purposes of this subsection, the chief
1-14 appraiser may not consider any period during which land is owned by
1-15 the state in determining whether the land has been diverted to a
1-16 nonagricultural use. The chief appraiser shall deliver a notice of
1-17 the determination to the owner of the land as soon as possible
1-18 after making the determination and shall include in the notice an
1-19 explanation of the owner's right to protest the determination. If
1-20 the owner does not file a timely protest or if the final
1-21 determination of the protest is that the additional taxes are due,
1-22 the assessor for each taxing unit shall prepare and deliver a bill
1-23 for the additional taxes [plus interest] as soon as practicable
1-24 after the change of use occurs. If the additional taxes are due
2-1 because of a sale of the land, the assessor for each taxing unit
2-2 shall prepare and deliver the bill as soon as practicable after the
2-3 sale occurs. The taxes [and interest] are due and become
2-4 delinquent and incur penalties and interest as provided by law for
2-5 ad valorem taxes imposed by the taxing unit if not paid before the
2-6 next February 1 that is at least 20 days after the date the bill is
2-7 delivered to the owner of the land.
2-8 (d) A tax lien attaches to the land on the date the sale or
2-9 change of use occurs to secure payment of the additional tax [and
2-10 interest] imposed by Subsection (c) of this section and any
2-11 penalties incurred. The lien exists in favor of all taxing units
2-12 for which the additional tax is imposed.
2-13 SECTION 2. Sections 23.47(c) and (d), Tax Code, are amended
2-14 to read as follows:
2-15 (c) A provision in an instrument pertaining to a loan
2-16 secured by a lien in favor of the lender on land appraised
2-17 according to this subchapter that requires the borrower to make a
2-18 payment to protect the lender from loss because of the imposition
2-19 of additional taxes [and interest] under Section 23.46 is void
2-20 unless the provision:
2-21 (1) requires the borrower to pay into an escrow
2-22 account established by the lender an amount equal to the additional
2-23 taxes [and interest] that would be due under Section 23.46 if a
2-24 sale or change of use occurred on January 1 of the year in which
2-25 the loan is granted or amended;
2-26 (2) requires the escrow account to bear interest to be
2-27 credited to the account monthly;
3-1 (3) permits the lender to apply money in the escrow
3-2 account to the payment of a bill for additional taxes [and
3-3 interest] under Section 23.46 before the loan is paid and requires
3-4 the lender to refund the balance remaining in the escrow account
3-5 after the bill is paid to the borrower; and
3-6 (4) requires the lender to refund the money in the
3-7 escrow account to the borrower on the payment of the loan.
3-8 (d) On the request of the borrower or the borrower's
3-9 representative, the assessor for each taxing unit shall compute the
3-10 additional taxes [and interest] that would be due that taxing unit
3-11 under Section 23.46 if a sale or change of use occurred on January
3-12 1 of the year in which the loan is granted or amended. The
3-13 assessor may charge a reasonable fee not to exceed the actual cost
3-14 of making the computation.
3-15 SECTION 3. Sections 23.55(a), (b), and (e), Tax Code, are
3-16 amended to read as follows:
3-17 (a) If the use of land that has been appraised as provided
3-18 by this subchapter changes, an additional tax is imposed on the
3-19 land equal to the difference between the taxes imposed on the land
3-20 for each of the five years preceding the year in which the change
3-21 of use occurs that the land was appraised as provided by this
3-22 subchapter and the tax that would have been imposed had the land
3-23 been taxed on the basis of market value in each of those years,
3-24 [plus interest at an annual rate of seven percent] calculated from
3-25 the dates on which the differences would have become due. For
3-26 purposes of this subsection, the chief appraiser may not consider
3-27 any period during which land is owned by the state in determining
4-1 whether a change in the use of the land has occurred.
4-2 (b) A tax lien attaches to the land on the date the change
4-3 of use occurs to secure payment of the additional tax [and
4-4 interest] imposed by this section and any penalties incurred. The
4-5 lien exists in favor of all taxing units for which the additional
4-6 tax is imposed.
4-7 (e) A determination that a change in use of the land has
4-8 occurred is made by the chief appraiser. The chief appraiser shall
4-9 deliver a notice of the determination to the owner of the land as
4-10 soon as possible after making the determination and shall include
4-11 in the notice an explanation of the owner's right to protest the
4-12 determination. If the owner does not file a timely protest or if
4-13 the final determination of the protest is that the additional taxes
4-14 are due, the assessor for each taxing unit shall prepare and
4-15 deliver a bill for the additional taxes [plus interest] as soon as
4-16 practicable. The taxes [and interest] are due and become
4-17 delinquent and incur penalties and interest as provided by law for
4-18 ad valorem taxes imposed by the taxing unit if not paid before the
4-19 next February 1 that is at least 20 days after the date the bill is
4-20 delivered to the owner of the land.
4-21 SECTION 4. Sections 23.58(c) and (d), Tax Code, are amended
4-22 to read as follows:
4-23 (c) A provision in an instrument pertaining to a loan
4-24 secured by a lien in favor of the lender on land appraised
4-25 according to this subchapter that requires the borrower to make a
4-26 payment to protect the lender from loss because of the imposition
4-27 of additional taxes [and interest] under Section 23.55 is void
5-1 unless the provision:
5-2 (1) requires the borrower to pay into an escrow
5-3 account established by the lender an amount equal to the additional
5-4 taxes [and interest] that would be due under Section 23.55 if a
5-5 change of use occurred on January 1 of the year in which the loan
5-6 is granted or amended;
5-7 (2) requires the escrow account to bear interest to be
5-8 credited to the account monthly;
5-9 (3) permits the lender to apply money in the escrow
5-10 account to the payment of a bill for additional taxes [and
5-11 interest] under Section 23.55 before the loan is paid and requires
5-12 the lender to refund the balance remaining in the escrow account
5-13 after the bill is paid to the borrower; and
5-14 (4) requires the lender to refund the money in the
5-15 escrow account to the borrower on the payment of the loan.
5-16 (d) On the request of the borrower or the borrower's
5-17 representative, the assessor for each taxing unit shall compute the
5-18 additional taxes [and interest] that would be due that taxing unit
5-19 under Section 23.55 if a change of use occurred on January 1 of the
5-20 year in which the loan is granted or amended. The assessor may
5-21 charge a reasonable fee not to exceed the actual cost of making the
5-22 computation.
5-23 SECTION 5. (a) The changes in law made by Sections 1 and 3
5-24 of this Act apply only to additional taxes that become due because
5-25 of a sale, diversion, or change of use of land that occurs on or
5-26 after the effective date of this Act. Additional taxes that become
5-27 due because of a sale, diversion, or change of use of land that
6-1 occurred before the effective date of this Act are governed by the
6-2 law in effect on the date of the sale, diversion, or change of use,
6-3 and the former law is continued in effect for that purpose.
6-4 (b) The changes in law made by Sections 2 and 4 of this Act
6-5 apply only to an instrument pertaining to a loan secured by a lien
6-6 in favor of the lender that is executed on or after the effective
6-7 date of this Act. An instrument pertaining to a loan secured by a
6-8 lien in favor of the lender that was executed before the effective
6-9 date of this Act is governed by the law in effect on the date the
6-10 instrument was executed, and the former law is continued in effect
6-11 for that purpose.
6-12 SECTION 6. The importance of this legislation and the
6-13 crowded condition of the calendars in both houses create an
6-14 emergency and an imperative public necessity that the
6-15 constitutional rule requiring bills to be read on three several
6-16 days in each house be suspended, and this rule is hereby suspended,
6-17 and that this Act take effect and be in force from and after its
6-18 passage, and it is so enacted.