79S10228 JD-D
By: Barrientos S.B. No. 44
A BILL TO BE ENTITLED
AN ACT
relating to property tax relief for residential tenants.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. 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 79th 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.
(c) In December 2005, each appraisal district shall place at
least one advertisement monthly in a newspaper of general
circulation in the county for which the appraisal district is
established. The advertisement shall be in 14-point or larger type
and contain language substantially similar to the language
prescribed by Subsection (a).
Sec. 61.006. TECHNICAL ASSISTANCE BY COMPTROLLER. (a) Not
later than December 1, 2005, the comptroller shall develop
materials in plain language to assist landlords in complying with
this chapter. The materials shall be printed in both English and
Spanish and copies shall be sent to each appraisal district on or
before December 15, 2005. A copy of the materials shall be provided
without cost to any property owner on request.
(b) The comptroller shall provide necessary technical
assistance to appraisal districts and landlords in complying with
this chapter.
Sec. 61.007. 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 ad valorem taxes
imposed on the dwelling unit for the preceding year and the amount
of the school district ad valorem 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 __
cents 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 ad valorem taxes imposed on the dwelling property for the
preceding year and the amount of the school district ad valorem
taxes that would have been imposed on that dwelling property for
that year if the dwelling property had been taxed at a school
district maintenance and operations tax rate of $___ per $100 of
taxable value, multiplied by the square footage in the tenant's
dwelling unit, and divided by the total net rentable square footage
of all rental dwelling units in the multifamily rental dwelling
property.
(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. 61.008. 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. 61.009. 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 passed by the 79th
Texas Legislature in 2005, the amount of school district property
taxes for your dwelling unit has been reduced by ____ (insert
percentage savings) percent for 2006. 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) In connection with each lease agreement for a rental
dwelling unit entered into in 2006, 2007, or 2008, the landlord
shall provide a notice to each tenant at the time the lease is
signed, 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 passed by the 79th
Texas Legislature in 2005, the amount of school district property
taxes for your dwelling unit has been reduced by ____ (insert
percentage savings) percent for 2006 (or 2007 or 2008). 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 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)."
(c) The notice required by Subsections (a) and (b) 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. 61.010. 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. 61.011. 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. 61.012. 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. 61.013. COMPTROLLER STUDY. (a) The comptroller shall
issue a preliminary report not later than March 1, 2007, if
sufficient data is available, and shall issue a final report not
later than December 1, 2008, to the governor, the lieutenant
governor, and the speaker of the house of representatives on the
implementation, administration, and effect of this chapter,
including findings as to the following:
(1) the impact of property tax relief on rental rates
throughout this state considering competitive market conditions,
new construction, operating expenses, and other relevant factors
impacting rental rates;
(2) the number of civil actions filed by tenants
against landlords to enforce the provisions of this chapter and the
type of properties owned by those landlords;
(3) the number and amount of civil penalties levied
against landlords for noncompliance with this chapter and the type
of properties owned by those landlords;
(4) the administrative costs associated with this
chapter incurred by the comptroller, appraisal districts, and
landlords; and
(5) any effect of reduced school district ad valorem
tax rates on increasing the supply of affordable housing for
purchase or rent by a person for use as a dwelling.
(b) In preparing the report, the comptroller shall consider
the need to recommend alternative methods for providing school
district ad valorem tax relief to persons who rent their homes.
Sec. 61.014. EXPIRATION. This chapter expires January 1,
2009.
SECTION 2. Chapter 1, Tax Code, is amended by adding Section
1.16 to read as follows:
Sec. 1.16. LANDLORD LIABILITY FOR RESIDENTIAL TENANT'S
PROPERTY TAX 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.
SECTION 3. (a) Except as provided by Subsection (b) of this
section:
(1) this Act takes effect immediately if it receives a
vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution; and
(2) if this Act does not receive the vote necessary for
immediate effect, this Act takes effect on the 91st day after the
last day of the legislative session.
(b) This Act takes effect only if __.B. No. ____, Acts of the
79th Legislature, 1st Called Session, 2005, becomes law. If that
bill does not become law, this Act has no effect.