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A BILL TO BE ENTITLED
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AN ACT
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relating to the additional tax imposed on land appraised for ad |
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valorem tax purposes as agricultural, open-space, or timber land if |
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the land is sold or diverted to a different use. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 23.46(c) and (d), Tax Code, are amended |
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to read as follows: |
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(c) If land that has been designated for agricultural use in |
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any year is sold or diverted to a nonagricultural use, the total |
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amount of additional taxes for the three years preceding the year in |
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which the land is sold or diverted [plus interest at the rate
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provided for delinquent taxes] becomes due. Subject to Subsection |
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(f), a determination that the land has been diverted to a |
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nonagricultural use is made by the chief appraiser. For purposes of |
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this subsection, the chief appraiser may not consider any period |
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during which land is owned by the state in determining whether the |
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land has been diverted to a nonagricultural use. The chief |
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appraiser shall deliver a notice of the determination to the owner |
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of the land as soon as possible after making the determination and |
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shall include in the notice an explanation of the owner's right to |
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protest the determination. If the owner does not file a timely |
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protest or if the final determination of the protest is that the |
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additional taxes are due, the assessor for each taxing unit shall |
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prepare and deliver a bill for the additional taxes [plus interest] |
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as soon as practicable after the change of use occurs. If the |
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additional taxes are due because of a sale of the land, the assessor |
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for each taxing unit shall prepare and deliver the bill as soon as |
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practicable after the sale occurs. The taxes [and interest] are due |
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and become delinquent and incur penalties and interest as provided |
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by law for other delinquent ad valorem taxes imposed by the taxing |
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unit if not paid before the next February 1 that is at least 20 days |
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after the date the bill is delivered to the owner of the land. |
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(d) A tax lien attaches to the land on the date the sale or |
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change of use occurs to secure payment of the additional tax [and
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interest] imposed by Subsection (c) [of this section] and any |
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penalties and interest incurred if the tax becomes delinquent. The |
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lien exists in favor of all taxing units for which the additional |
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tax is imposed. |
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SECTION 2. Sections 23.47(c) and (d), Tax Code, are amended |
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to read as follows: |
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(c) A provision in an instrument pertaining to a loan |
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secured by a lien in favor of the lender on land appraised according |
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to this subchapter that requires the borrower to make a payment to |
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protect the lender from loss because of the imposition of |
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additional taxes [and interest] under Section 23.46 is void unless |
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the provision: |
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(1) requires the borrower to pay into an escrow |
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account established by the lender an amount equal to the additional |
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taxes [and interest] that would be due under Section 23.46 if a sale |
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or change of use occurred on January 1 of the year in which the loan |
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is granted or amended; |
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(2) requires the escrow account to bear interest to be |
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credited to the account monthly; |
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(3) permits the lender to apply money in the escrow |
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account to the payment of a bill for additional taxes [and interest] |
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under Section 23.46 before the loan is paid and requires the lender |
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to refund the balance remaining in the escrow account after the bill |
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is paid to the borrower; and |
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(4) requires the lender to refund the money in the |
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escrow account to the borrower on the payment of the loan. |
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(d) On the request of the borrower or the borrower's |
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representative, the assessor for each taxing unit shall compute the |
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additional taxes [and interest] that would be due that taxing unit |
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under Section 23.46 if a sale or change of use occurred on January 1 |
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of the year in which the loan is granted or amended. The assessor |
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may charge a reasonable fee not to exceed the actual cost of making |
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the computation. |
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SECTION 3. Sections 23.55(a), (b), (e), (f), (m), and (n), |
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Tax Code, are amended to read as follows: |
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(a) If the use of land that has been appraised as provided by |
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this subchapter changes, an additional tax is imposed on the land |
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equal to the difference between the taxes imposed on the land for |
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each of the three [five] years preceding the year in which the |
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change of use occurs that the land was appraised as provided by this |
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subchapter and the tax that would have been imposed had the land |
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been taxed on the basis of market value in each of those years[,
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plus interest at an annual rate of seven percent calculated from the
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dates on which the differences would have become due]. For purposes |
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of this subsection, the chief appraiser may not consider any period |
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during which land is owned by the state in determining whether a |
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change in the use of the land has occurred. |
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(b) A tax lien attaches to the land on the date the change of |
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use occurs to secure payment of the additional tax [and interest] |
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imposed by this section and any penalties and interest incurred if |
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the tax becomes delinquent. The lien exists in favor of all taxing |
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units for which the additional tax is imposed. |
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(e) Subject to Section 23.551, a determination that a change |
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in use of the land has occurred is made by the chief appraiser. The |
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chief appraiser shall deliver a notice of the determination to the |
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owner of the land as soon as possible after making the determination |
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and shall include in the notice an explanation of the owner's right |
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to protest the determination. If the owner does not file a timely |
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protest or if the final determination of the protest is that the |
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additional taxes are due, the assessor for each taxing unit shall |
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prepare and deliver a bill for the additional taxes [plus interest] |
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as soon as practicable. The taxes [and interest] are due and become |
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delinquent and incur penalties and interest as provided by law for |
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ad valorem taxes imposed by the taxing unit if not paid before the |
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next February 1 that is at least 20 days after the date the bill is |
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delivered to the owner of the land. |
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(f) The sanctions provided by Subsection (a) [of this
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section] do not apply if the change of use occurs as a result of: |
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(1) a sale for right-of-way; |
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(2) a condemnation; |
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(3) a transfer of the property to the state or a |
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political subdivision of the state to be used for a public purpose; |
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or |
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(4) a transfer of the property from the state, a |
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political subdivision of the state, or a nonprofit corporation |
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created by a municipality with a population of more than one million |
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under the Development Corporation Act (Subtitle C1, Title 12, Local |
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Government Code) to an individual or a business entity for purposes |
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of economic development if the comptroller determines that the |
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economic development is likely to generate for deposit in the |
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general revenue fund during the next two fiscal bienniums an amount |
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of taxes and other revenues that equals or exceeds 20 times the |
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amount of additional taxes [and interest] that would have been |
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imposed under Subsection (a) had the sanctions provided by that |
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subsection applied to the transfer. |
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(m) For purposes of determining whether a transfer of land |
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qualifies for the exemption from additional taxes provided by |
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Subsection (f)(4), on an application of the entity transferring or |
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proposing to transfer the land or of the individual or entity to |
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which the land is transferred or proposed to be transferred, the |
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comptroller shall determine the amount of taxes and other revenues |
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likely to be generated as a result of the economic development for |
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deposit in the general revenue fund during the next two fiscal |
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bienniums. If the comptroller determines that the amount of those |
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revenues is likely to equal or exceed 20 times the amount of |
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additional taxes [and interest] that would be imposed under |
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Subsection (a) if the sanctions provided by that subsection applied |
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to the transfer, the comptroller shall issue a letter to the |
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applicant stating the comptroller's determination and shall send a |
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copy of the letter by regular mail to the chief appraiser. |
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(n) Within one year of the conclusion of the two fiscal |
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bienniums for which the comptroller issued a letter as provided |
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under Subsection (m), the board of directors of the appraisal |
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district, by official board action, may direct the chief appraiser |
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to request the comptroller to determine if the amount of revenues |
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was equal to or exceeded 20 times the amount of taxes [and interest] |
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that would have been imposed under Subsection (a). The comptroller |
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shall issue a finding as to whether the amount of revenue met the |
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projected increases. The chief appraiser shall review the results |
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of the comptroller's finding and shall make a determination as to |
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whether sanctions under Subsection (a) should be imposed. If the |
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chief appraiser determines that the sanctions provided by |
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Subsection (a) shall be imposed, the sanctions shall be based on the |
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date of the transfer of the property under Subsection (f)(4). |
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SECTION 4. Sections 23.58(c) and (d), Tax Code, are amended |
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to read as follows: |
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(c) A provision in an instrument pertaining to a loan |
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secured by a lien in favor of the lender on land appraised according |
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|
to this subchapter that requires the borrower to make a payment to |
|
|
protect the lender from loss because of the imposition of |
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additional taxes [and interest] under Section 23.55 is void unless |
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the provision: |
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(1) requires the borrower to pay into an escrow |
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account established by the lender an amount equal to the additional |
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taxes [and interest] that would be due under Section 23.55 if a |
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change of use occurred on January 1 of the year in which the loan is |
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granted or amended; |
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(2) requires the escrow account to bear interest to be |
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credited to the account monthly; |
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(3) permits the lender to apply money in the escrow |
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account to the payment of a bill for additional taxes [and interest] |
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under Section 23.55 before the loan is paid and requires the lender |
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to refund the balance remaining in the escrow account after the bill |
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is paid to the borrower; and |
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(4) requires the lender to refund the money in the |
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escrow account to the borrower on the payment of the loan. |
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(d) On the request of the borrower or the borrower's |
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representative, the assessor for each taxing unit shall compute the |
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additional taxes [and interest] that would be due that taxing unit |
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under Section 23.55 if a change of use occurred on January 1 of the |
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year in which the loan is granted or amended. The assessor may |
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charge a reasonable fee not to exceed the actual cost of making the |
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computation. |
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SECTION 5. Sections 23.76(a), (b), and (e), Tax Code, are |
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amended to read as follows: |
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(a) If the use of land that has been appraised as provided by |
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this subchapter changes, an additional tax is imposed on the land |
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equal to the difference between the taxes imposed on the land for |
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each of the three [five] years preceding the year in which the |
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change of use occurs that the land was appraised as provided by this |
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subchapter and the tax that would have been imposed had the land |
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been taxed on the basis of market value in each of those years[,
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plus interest at an annual rate of seven percent calculated from the
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dates on which the differences would have become due]. |
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(b) A tax lien attaches to the land on the date the change of |
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use occurs to secure payment of the additional tax [and interest] |
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imposed by this section and any penalties and interest incurred if |
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the tax becomes delinquent. The lien exists in favor of all taxing |
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units for which the additional tax is imposed. |
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(e) A determination that a change in use of the land has |
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occurred is made by the chief appraiser. The chief appraiser shall |
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deliver a notice of the determination to the owner of the land as |
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soon as possible after making the determination and shall include |
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in the notice an explanation of the owner's right to protest the |
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determination. If the owner does not file a timely protest or if |
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the final determination of the protest is that the additional taxes |
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are due, the assessor for each taxing unit shall prepare and deliver |
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a bill for the additional taxes [and interest] as soon as |
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practicable after the change of use occurs. The taxes [and
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interest] are due and become delinquent and incur penalties and |
|
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interest as provided by law for ad valorem taxes imposed by the |
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taxing unit if not paid before the next February 1 that is at least |
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20 days after the date the bill is delivered to the owner of the |
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land. |
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SECTION 6. Sections 23.9807(a), (b), (c), and (f), Tax |
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Code, are amended to read as follows: |
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(a) If the use of land that has been appraised as provided by |
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this subchapter changes to a use that qualifies the land for |
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appraisal under Subchapter E, an additional tax is imposed on the |
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land equal to [the sum of:
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[(1)] the difference between: |
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(1) [(A)] the taxes imposed on the land for each of the |
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three [five] years preceding the year in which the change of use |
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occurs that the land was appraised as provided by this subchapter; |
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and |
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(2) [(B)] the taxes that would have been imposed had |
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the land been appraised under Subchapter E in each of those years[;
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and
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[(2)
interest at an annual rate of seven percent
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calculated from the dates on which the differences would have
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become due]. |
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(b) If the use of land that has been appraised as provided by |
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this subchapter changes to a use that does not qualify the land for |
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appraisal under Subchapter E or under this subchapter, an |
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additional tax is imposed on the land equal to [the sum of:
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[(1)] the difference between: |
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(1) [(A)] the taxes imposed on the land for each of the |
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three [five] years preceding the year in which the change of use |
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occurs that the land was appraised as provided by this subchapter; |
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and |
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(2) [(B)] the taxes that would have been imposed had |
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the land been taxed on the basis of market value in each of those |
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years[; and
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[(2)
interest at an annual rate of seven percent
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calculated from the dates on which the differences would have
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become due]. |
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(c) A tax lien attaches to the land on the date the change of |
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use occurs to secure payment of the additional tax [and interest] |
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imposed by this section and any penalties and interest incurred if |
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the tax becomes delinquent. The lien exists in favor of all taxing |
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units for which the additional tax is imposed. |
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(f) A determination that a change in use of the land has |
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occurred is made by the chief appraiser. The chief appraiser shall |
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deliver a notice of the determination to the owner of the land as |
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soon as possible after making the determination and shall include |
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in the notice an explanation of the owner's right to protest the |
|
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determination. If the owner does not file a timely protest or if |
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the final determination of the protest is that the additional taxes |
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are due, the assessor for each taxing unit shall prepare and deliver |
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a bill for the additional taxes [and interest] as soon as |
|
|
practicable after the change of use occurs. The taxes [and
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|
interest] are due and become delinquent and incur penalties and |
|
|
interest as provided by law for ad valorem taxes imposed by the |
|
|
taxing unit if not paid before the next February 1 that is at least |
|
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20 days after the date the bill is delivered to the owner of the |
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land. |
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SECTION 7. Sections 23.46(c) and (d), Tax Code, as amended |
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by this Act, apply only to a sale or diversion to a nonagricultural |
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use of land appraised under Subchapter C, Chapter 23, Tax Code, that |
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occurs on or after the effective date of this Act. |
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SECTION 8. Sections 23.47(c) and (d), Tax Code, as amended |
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by this Act, apply only to a loan secured by a lien on land |
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designated for agricultural use that is contracted for on or after |
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the effective date of this Act. |
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SECTION 9. Sections 23.55(a), (b), (e), (f), (m), and (n), |
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Tax Code, as amended by this Act, apply only to a change of use of |
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land appraised under Subchapter D, Chapter 23, Tax Code, that |
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occurs on or after the effective date of this Act. |
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SECTION 10. Sections 23.58(c) and (d), Tax Code, as amended |
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by this Act, apply only to a loan secured by a lien on open-space |
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land that is contracted for on or after the effective date of this |
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Act. |
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SECTION 11. Sections 23.76(a), (b), and (e), Tax Code, as |
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amended by this Act, apply only to a change of use of land appraised |
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under Subchapter E, Chapter 23, Tax Code, that occurs on or after |
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the effective date of this Act. |
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SECTION 12. Sections 23.9807(a), (b), (c), and (f), Tax |
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Code, as amended by this Act, apply only to a change of use of land |
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appraised under Subchapter H, Chapter 23, Tax Code, that occurs on |
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or after the effective date of this Act. |
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SECTION 13. This Act takes effect September 1, 2019. |