1-1 By: Haywood S.B. No. 1481
1-2 (In the Senate - Filed March 12, 1999; March 15, 1999, read
1-3 first time and referred to Committee on Natural Resources;
1-4 April 16, 1999, reported favorably by the following vote: Yeas 5,
1-5 Nays 0; April 16, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the appraisal of agricultural land for ad valorem
1-9 taxation.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Subsections (c) and (d), Section 23.46, Tax Code,
1-12 are amended to read as follows:
1-13 (c) If land that has been designated for agricultural use in
1-14 any year is sold or diverted to a nonagricultural use, the total
1-15 amount of additional taxes for the three years preceding the year
1-16 in which the land is sold or diverted [plus interest at the rate
1-17 provided for delinquent taxes] becomes due. A determination that
1-18 the land has been diverted to a nonagricultural use is made by the
1-19 chief appraiser. For purposes of this subsection, the chief
1-20 appraiser may not consider any period during which land is owned by
1-21 the state in determining whether the land has been diverted to a
1-22 nonagricultural use. The chief appraiser shall deliver a notice of
1-23 the determination to the owner of the land as soon as possible
1-24 after making the determination and shall include in the notice an
1-25 explanation of the owner's right to protest the determination. If
1-26 the owner does not file a timely protest or if the final
1-27 determination of the protest is that the additional taxes are due,
1-28 the assessor for each taxing unit shall prepare and deliver a bill
1-29 for the additional taxes [plus interest] as soon as practicable
1-30 after the change of use occurs. If the additional taxes are due
1-31 because of a sale of the land, the assessor for each taxing unit
1-32 shall prepare and deliver the bill as soon as practicable after the
1-33 sale occurs. The taxes [and interest] are due and become
1-34 delinquent and incur penalties and interest as provided by law for
1-35 ad valorem taxes imposed by the taxing unit if not paid before the
1-36 next February 1 that is at least 20 days after the date the bill is
1-37 delivered to the owner of the land.
1-38 (d) A tax lien attaches to the land on the date the sale or
1-39 change of use occurs to secure payment of the additional tax [and
1-40 interest] imposed by Subsection (c) of this section and any
1-41 penalties incurred. The lien exists in favor of all taxing units
1-42 for which the additional tax is imposed.
1-43 SECTION 2. Subsections (c) and (d), Section 23.47, Tax Code,
1-44 are amended to read as follows:
1-45 (c) A provision in an instrument pertaining to a loan
1-46 secured by a lien in favor of the lender on land appraised
1-47 according to this subchapter that requires the borrower to make a
1-48 payment to protect the lender from loss because of the imposition
1-49 of additional taxes [and interest] under Section 23.46 is void
1-50 unless the provision:
1-51 (1) requires the borrower to pay into an escrow
1-52 account established by the lender an amount equal to the additional
1-53 taxes [and interest] that would be due under Section 23.46 if a
1-54 sale or change of use occurred on January 1 of the year in which
1-55 the loan is granted or amended;
1-56 (2) requires the escrow account to bear interest to be
1-57 credited to the account monthly;
1-58 (3) permits the lender to apply money in the escrow
1-59 account to the payment of a bill for additional taxes [and
1-60 interest] under Section 23.46 before the loan is paid and requires
1-61 the lender to refund the balance remaining in the escrow account
1-62 after the bill is paid to the borrower; and
1-63 (4) requires the lender to refund the money in the
1-64 escrow account to the borrower on the payment of the loan.
2-1 (d) On the request of the borrower or the borrower's
2-2 representative, the assessor for each taxing unit shall compute the
2-3 additional taxes [and interest] that would be due that taxing unit
2-4 under Section 23.46 if a sale or change of use occurred on January
2-5 1 of the year in which the loan is granted or amended. The
2-6 assessor may charge a reasonable fee not to exceed the actual cost
2-7 of making the computation.
2-8 SECTION 3. Subsections (a), (b), and (e), Section 23.55,
2-9 Tax Code, are amended to read as follows:
2-10 (a) If the use of land that has been appraised as provided
2-11 by this subchapter changes, an additional tax is imposed on the
2-12 land equal to the difference between the taxes imposed on the land
2-13 for each of the five years preceding the year in which the change
2-14 of use occurs that the land was appraised as provided by this
2-15 subchapter and the tax that would have been imposed had the land
2-16 been taxed on the basis of market value in each of those years,
2-17 [plus interest at an annual rate of seven percent] calculated from
2-18 the dates on which the differences would have become due. For
2-19 purposes of this subsection, the chief appraiser may not consider
2-20 any period during which land is owned by the state in determining
2-21 whether a change in the use of the land has occurred.
2-22 (b) A tax lien attaches to the land on the date the change
2-23 of use occurs to secure payment of the additional tax [and
2-24 interest] imposed by this section and any penalties incurred. The
2-25 lien exists in favor of all taxing units for which the additional
2-26 tax is imposed.
2-27 (e) A determination that a change in use of the land has
2-28 occurred is made by the chief appraiser. The chief appraiser shall
2-29 deliver a notice of the determination to the owner of the land as
2-30 soon as possible after making the determination and shall include
2-31 in the notice an explanation of the owner's right to protest the
2-32 determination. If the owner does not file a timely protest or if
2-33 the final determination of the protest is that the additional taxes
2-34 are due, the assessor for each taxing unit shall prepare and
2-35 deliver a bill for the additional taxes [plus interest] as soon as
2-36 practicable. The taxes [and interest] are due and become
2-37 delinquent and incur penalties and interest as provided by law for
2-38 ad valorem taxes imposed by the taxing unit if not paid before the
2-39 next February 1 that is at least 20 days after the date the bill is
2-40 delivered to the owner of the land.
2-41 SECTION 4. Subsections (c) and (d), Section 23.58, Tax Code,
2-42 are amended to read as follows:
2-43 (c) A provision in an instrument pertaining to a loan
2-44 secured by a lien in favor of the lender on land appraised
2-45 according to this subchapter that requires the borrower to make a
2-46 payment to protect the lender from loss because of the imposition
2-47 of additional taxes [and interest] under Section 23.55 is void
2-48 unless the provision:
2-49 (1) requires the borrower to pay into an escrow
2-50 account established by the lender an amount equal to the additional
2-51 taxes [and interest] that would be due under Section 23.55 if a
2-52 change of use occurred on January 1 of the year in which the loan
2-53 is granted or amended;
2-54 (2) requires the escrow account to bear interest to be
2-55 credited to the account monthly;
2-56 (3) permits the lender to apply money in the escrow
2-57 account to the payment of a bill for additional taxes [and
2-58 interest] under Section 23.55 before the loan is paid and requires
2-59 the lender to refund the balance remaining in the escrow account
2-60 after the bill is paid to the borrower; and
2-61 (4) requires the lender to refund the money in the
2-62 escrow account to the borrower on the payment of the loan.
2-63 (d) On the request of the borrower or the borrower's
2-64 representative, the assessor for each taxing unit shall compute the
2-65 additional taxes [and interest] that would be due that taxing unit
2-66 under Section 23.55 if a change of use occurred on January 1 of the
2-67 year in which the loan is granted or amended. The assessor may
2-68 charge a reasonable fee not to exceed the actual cost of making the
2-69 computation.
3-1 SECTION 5. (a) The changes in law made by Sections 1 and 3
3-2 of this Act apply only to additional taxes that become due because
3-3 of a sale, diversion, or change of use of land that occurs on or
3-4 after the effective date of this Act. Additional taxes that become
3-5 due because of a sale, diversion, or change of use of land that
3-6 occurred before the effective date of this Act are governed by the
3-7 law in effect on the date of the sale, diversion, or change of use,
3-8 and the former law is continued in effect for that purpose.
3-9 (b) The changes in law made by Sections 2 and 4 of this Act
3-10 apply only to an instrument pertaining to a loan secured by a lien
3-11 in favor of the lender that is executed on or after the effective
3-12 date of this Act. An instrument pertaining to a loan secured by a
3-13 lien in favor of the lender that was executed before the effective
3-14 date of this Act is governed by the law in effect on the date the
3-15 instrument was executed, and the former law is continued in effect
3-16 for that purpose.
3-17 SECTION 6. The importance of this legislation and the
3-18 crowded condition of the calendars in both houses create an
3-19 emergency and an imperative public necessity that the
3-20 constitutional rule requiring bills to be read on three several
3-21 days in each house be suspended, and this rule is hereby suspended,
3-22 and that this Act take effect and be in force from and after its
3-23 passage, and it is so enacted.
3-24 * * * * *