S.B. 480 78(R)    BILL ANALYSIS


S.B. 480
By: Madla
Local Government Ways and Means
Committee Report (Amended)



BACKGROUND AND PURPOSE 

Currently, if the use of land that has been appraised changes, an
additional tax is imposed on the 
land equal to the difference between the taxes imposed on the land for
each of the five years 
preceding the year in which the change of use occurs that the land was
appraised and the tax that 
would have been imposed had the land been taxed on the basis of market
value in each of those 
years, plus interest at an annual rate of seven percent calculated from
the dates on which the 
differences would have become due. However, an exemption exists which
states this tax does 
not apply if there is a transfer of property to the state or a political
subdivision of the state to be 
used for a public purpose. S.B. 480 would exempt certain land from the
additional tax 
imposed on the change of use on land appraised for ad valorem tax purposes
as open-space land 
if the property is the subject of transfer from the state or a political
subdivision of the state to an 
individual or a business entity for purposes of economic development.

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. 

ANALYSIS

SECTION 1. Amends Section 23.55, Tax Code, by amending Subsection (f) and
adding 
Subsections (m) and (n), as follows:

 (f) Provides that the sanctions provided by Subsection (a) of this
section do not apply if 
 the change of use occurs as a result of certain actions. Makes a
nonsubstantive change. 

 (m) Requires the comptroller of public accounts (comptroller), for
purposes of 
 determining whether a transfer of land qualifies for the exemption from
additional taxes 
 provided by Subsection (f)(4), on the application of the entity
transferring or proposing to 
 transfer the land or of the individual or entity to which the land is
transferred or proposed 
 to be transferred, to determine the amount of taxes and other revenues
likely to be 
 generated as a result of the economic development for deposit in the
general revenue fund 
in the next two fiscal bienniums. Requires the comptroller, if the
comptroller determines that the amount of those revenues is likely to
equal or exceed 20 times the amount of 
 additional taxes and interest that would be imposed under Subsection (a)
if the sanctions 
 provided by that subsection applied to the transfer, to issue a letter to
the applicant stating 
 the comptroller's determination and send a copy of the letter by regular
mail to the chief 
 appraiser.

 (n) Authorizes the board of directors of the appraisal district (board),
by official board 
 action, to direct the chief appraiser to request the comptroller to
determine if the amount 
 of revenues was equal to or exceeded 20 times the amount of taxes and
interest that 
would have been imposed under Subsection (a), within one year of the
conclusion of the two fiscal bienniums for which the comptroller issued a
letter as provided under Subsection (m). Requires the comptroller to issue
a finding as to whether sanctions under Subsection (a) should be imposed.
Requires the sanctions to be based on the date of transfer of the
property, pursuant to Subsection (f)(4), if the chief appraiser determines
that the sanctions provided by Subsection (a) shall be imposed. 
  SECTION 2.   (a) Effective date: upon passage or September 1, 2003.

   (b) Makes application of this Act prospective.


EFFECTIVE DATE

Upon passage or September 1, 2003.

EXPLANATION OF AMENDMENTS

Amends proposed Section 23.55(f)(4), Tax Code, and proposed Section
23.55(m), Tax Code, by striking "in the next fiscal biennium" and
substituting "during the next two fiscal bienniums." Also amends proposed
Section 23.55(n), Tax Code, by striking "fiscal biennium" and substituting
"two fiscal bienniums."