Floor Packet Page No. 443
AMEND CSHB 3 BY ADDING THE FOLLOWING APPROPRIATELY DESIGNATED
ARTICLE AND RE-DESIGNATING SUBSEQUENT ARTICLES ACCORDINGLY:
ARTICLE ___ PROPERTY TAXATION
PART B. RESIDENTIAL TENANT PROPERTY TAX RELIEF
SECTION __.01. Title 1, Tax Code, is amended by adding
Chapter 61 to read as follows:
CHAPTER 61. PROPERTY TAX RELIEF FOR RESIDENTIAL TENANTS
Sec. 61.001. PURPOSE. The purpose of this chapter is to
ensure that residential rental tenants receive direct and immediate
benefit from reductions in local school district ad valorem taxes
until the benefit of that tax relief is fully reflected in rental
rates through free market competition and that every residential
landlord gives a monthly rent credit or rebate, at the landlord's
option, to each tenant who is renting a residential dwelling unit in
this state during 2006, 2007, and 2008.
Sec. 61.002. DEFINITIONS. In this chapter:
(1) "Landlord" means the owner, lessor, or sublessor
of a dwelling unit, but does not include a manager or agent of the
landlord unless the manager or agent purports to be the owner,
lessor, or sublessor in a written or oral lease.
(2) "Lease" means a written or oral agreement between
a landlord and tenant that establishes or modifies the terms,
conditions, rules, or other provisions regarding the use and
occupancy of a dwelling unit.
(3) "Multifamily rental dwelling property" means a
multiunit residential property with two or more rental dwelling
units. The term includes a duplex, apartment building, dormitory,
manufactured housing community, retirement center or community,
and assisted living center and any other multiunit rental
residential property subject to local school district ad valorem
taxes.
(4) "Rent" includes the total amount charged by a
landlord, or by a person on the landlord's behalf, for the use and
occupancy of a dwelling unit. The term does not include a
refundable security deposit.
(5) "Rental dwelling unit" means one or more rooms
rented for use as a permanent residence under a single lease to one
or more tenants.
(6) "Tenant" means an individual who is authorized by
a lease to occupy a dwelling to the exclusion of others other than
cotenants and who is obligated under the lease to pay rent.
Sec. 61.003. APPLICABILITY. (a) This chapter applies only
to a rental dwelling unit or multifamily rental dwelling property
that is subject to ad valorem taxation by a school district.
(b) This chapter does not apply to a temporary residential
tenancy created by a contract of sale under which the buyer is
entitled to occupy the property before closing or the seller is
entitled to occupy the property after closing for a term of not more
than 90 days.
Sec. 61.004. CREDIT OR REBATE TO TENANT OF LANDLORD'S
PROPERTY TAX SAVINGS. A landlord shall provide each of the
landlord's tenants with a monthly credit or rebate on the tenant's
rent to reflect a portion of the landlord's school district ad
valorem tax savings for 2006, 2007, and 2008.
Sec. 61.005. NOTICE BY CHIEF APPRAISERS. (a) On or before
December 1, 2005, or as soon as practicable after that date, the
chief appraiser of each appraisal district shall send to all
residential property owners a notice describing the requirements of
this chapter. The notice shall contain language substantially
similar to the following:
"Due to the property tax relief law approved by the 2005
Texas Legislature, residential landlords are required to pass along
school district ad valorem tax savings to their tenants under all
leases in effect as of January 1, 2006, and for all leases entered
into in 2006, 2007, and 2008. These savings must be provided to
tenants by giving a monthly rent credit or rebate that reflects a
portion of the property tax savings on school property taxes.
Failure to comply with this law could result in severe penalties,
including a civil penalty of $100, treble damages, and attorney's
fees. Information on complying with this law is available by
contacting the (name, address, and telephone number of appraisal
district) or by contacting the Texas Comptroller of Public Accounts
by calling 1-800-252-5555."
(b) The notice required under Subsection (a) may be sent to
property owners as part of another communication sent by the
appraisal district under Section 31.01 and is not required to be
sent to property owners as a separate communication.
Sec. 61.006. TAX SAVINGS CALCULATIONS BY LANDLORDS. (a)
For each year to which this chapter applies, a landlord shall
determine the monthly school district ad valorem tax savings
payable to the landlord's tenants as follows:
(1) the monthly rent credit or rebate for a
single-family rental dwelling unit is equal to 6.25 percent of the
difference between the amount of school district maintenance and
operations taxes imposed on the dwelling unit for the 2005 tax year
and the amount of the school district maintenance and operations
taxes that would have been imposed on that dwelling unit for that
year if the dwelling unit had been taxed at a school district
maintenance and operations tax rate of $1.12 plus the school
district enrichment tax rate in that tax year per $100 of taxable
value; and
(2) the monthly rent credit or rebate for a rental
dwelling unit in a multifamily rental dwelling property is equal to
6.25 percent of the difference between the amount of school
district maintenance and operations taxes imposed on the dwelling
unit for the 2005 tax year and the amount of the school district
maintenance and operations taxes that would have been imposed on
that dwelling unit for that year if the dwelling unit had been taxed
at the school district maintenance and operations tax rate of the
current year.
(b) The amount of the rent credit or rebate under Subsection
(a) shall be calculated on a per-dwelling-unit basis and not on a
per-tenant basis.
(c) If the amount of the rent credit or rebate calculated
under Subsection (a) is less than zero, the rent credit or rebate is
zero.
Sec. 61.007. DATE OF REQUIRED CREDIT OR REBATE. (a) If a
landlord gives a monthly credit to a tenant under this chapter, the
landlord shall give the credit on the due date for each month's
rent.
(b) If a landlord pays a monthly rent rebate to the tenant,
the landlord shall pay the rebate not later than the 10th day after
the date the tenant pays the entire rent due for the month. A
landlord is presumed to have timely paid a rebate if the rebate is
placed in the United States mail and postmarked on or before that
date.
(c) If the tenant's rent is payable weekly, the amount of
the weekly credit or rebate is equal to 1/52 of the credit or rebate
for the entire year.
Sec. 61.008. LANDLORD'S NOTICE TO TENANTS. (a) In
connection with each lease agreement for a rental dwelling unit
entered into before January 1, 2006, that has not terminated or
expired as of that date, the landlord shall provide a notice to each
tenant on or before January 5, 2006, in boldface, 14-point or larger
type, that substantially states the following:
"NOTICE OF TAX SAVINGS ON RENT
"Your current monthly rent on (insert unit number or
street address) is $(insert amount of rent).
"Because of the property tax relief law approved by the
2005 Texas Legislature, the amount of school district property
taxes for your dwelling unit has been reduced by (insert percentage
savings) percent. The property tax relief law provides that the
property owner must pass along tax savings to you and other tenants
until sufficient time has elapsed for the tax relief to be fully
reflected in rental rates through free market competition.
"Accordingly, you will receive a rent credit (or rebate
check) of $ (insert monthly prorated amount) for the current month
of January and for each month thereafter until the date your current
lease expires or December 31, 2008, whichever date is first. If the
amount of taxes imposed on your dwelling unit is not increased or
decreased, the cumulative amount of property tax savings that will
be passed on to you during the term of your lease as a result of the
2005 property tax relief legislation is projected to be $ (insert
cumulative savings for the unit for the term of the lease).
"This means the net rent you will be paying for this
month and each subsequent month under your current lease will be $
(insert net rent rate), and your rent should also be lower if you
enter into a new lease for any rental dwelling unit in Texas any
time in 2006, 2007, or 2008, through the date your new lease term
expires or December 31, 2008, whichever date is earlier.
"If you have any questions about this new law, please
contact the ______ County Appraisal District at (insert address
and main phone number of the appraisal district established for the
county in which the rental dwelling unit is located)."
(b) The notice required by Subsection (a) shall be
translated and printed in English and Spanish. A notice provided by
a landlord under this section must be provided in both languages if
the rental dwelling unit is located in a county in which the
Hispanic population exceeds 25 percent of the total population of
that county according to the most recent federal census information
available.
Sec. 61.009. CREDIT OR REBATE FOR MULTIPLE TENANTS. If two
or more tenants are on a lease for the same rental dwelling unit,
the credit or rebate under this chapter shall be provided jointly to
all tenants renting the dwelling.
Sec. 61.010. PENALTIES. (a) A landlord who fails to comply
with this chapter is liable to the affected tenant for a civil
penalty of $100 and treble the amount of any required rent credit or
rebate that was not provided to the tenant.
(b) In a suit involving the payment of a rent credit or
rebate, the prevailing party is entitled to recover reasonable
attorney's fees from the nonprevailing party.
Sec. 61.011. TAX APPRAISALS. In tax years 2006-2008, a
chief appraiser or an appraisal district may not consider a
reduction of school district ad valorem taxes attributable to this
chapter in any determination of the appraised value of a rental
dwelling unit, real property containing a rental dwelling unit, or
a multifamily rental dwelling property.
Sec. 61.012. EXPIRATION. This chapter expires January 1,
2009.
SECTION __.02. Chapter 1, Tax Code, is amended by adding
Section 1.16 to read as follows:
Sec. 1.16. LANDLORD LIABILITY FOR RESIDENTIAL TENANTS
RELIEF. The expiration of Chapter 61 does not affect the liability
of a landlord or other person for any amount arising under Chapter
61 before the expiration, and the law governing that liability
remains in effect notwithstanding the expiration for purposes of
enforcing or satisfying the liability.