By: Hall S.B. No. 25

A BILL TO BE ENTITLED

AN ACT

relating to the repeal of the additional ad valorem taxes imposed as a result of a sale or change of use of certain land.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1. REPEAL OF ADDITIONAL TAX PROVISIONS IN SUBCHAPTERS C, D,

E, F, G, AND H, CHAPTER 23, TAX CODE

SECTION 1.01. Section 1.07(d), Tax Code, is amended to read as follows:

(d) A notice required by Section 11.43(q), 11.45(d), 23.44(d), [23.46(c) or (f),] 23.54(e), 23.541(c), [23.55(e),] 23.551(a), 23.57(d), [23.76(e),] 23.79(d), or 23.85(d) must be sent by certified mail.

SECTION 1.02. Section 23.52(e), Tax Code, is amended to read as follows:

(e) The [For the purposes of Section 23.55 of this code, the] chief appraiser [also] shall determine the market value of qualified open-space land and shall record both the market value and the appraised value in the appraisal records.

SECTION 1.03. Section 23.524(e), Tax Code, is amended to read as follows:

(e) Notwithstanding Subsection (b) or (c), the eligibility of [For the purposes of this subchapter, a change of use of the] land subject to this section for appraisal under this subchapter is considered to have ended [occurred] on the day the period prescribed by Subsection (c) begins if the owner has not fully complied with the terms of the agreement described by Subsection (b) on the date the agreement ends.

SECTION 1.04. Sections 23.551(a) and (d), Tax Code, are amended to read as follows:

(a) If land appraised as provided by this subchapter is owned by an individual 65 years of age or older, before making a determination that [a change in use of] the land is no longer eligible for appraisal under this subchapter [has occurred], the chief appraiser shall deliver a written notice to the owner stating that the chief appraiser believes [a change in use of] the land may no longer be eligible for appraisal under this subchapter [have occurred].

(d) If the chief appraiser does not receive a response on or before the 60th day after the date the notice is mailed, the chief appraiser must make a reasonable effort to locate the owner and determine whether the land remains eligible to be appraised as provided by this subchapter before determining that [a change in use of] the land is no longer eligible for appraisal under this subchapter [has occurred].

SECTION 1.05. Section 23.73(c), Tax Code, is amended to read as follows:

(c) The [For the purposes of Section 23.76 of this code, the] chief appraiser [also] shall determine the market value of qualified timber land and shall record both the market value and the appraised value in the appraisal records.

SECTION 1.06. Section 31.01(c), Tax Code, is amended to read as follows:

(c) The tax bill or a separate statement accompanying the tax bill shall:

(1) identify the property subject to the tax;

(2) state the appraised value, assessed value, and taxable value of the property;

(3) if the property is land appraised as provided by Subchapter C, D, E, or H, Chapter 23, state the market value of the land [and the taxable value for purposes of deferred or additional taxation as provided by Section 23.46, 23.55, 23.76, or 23.9807, as applicable];

(4) state the assessment ratio for the taxing unit;

(5) state the type and amount of any partial exemption applicable to the property, indicating whether it applies to appraised or assessed value;

(6) state the total tax rate for the taxing unit;

(7) state the amount of tax due, the due date, and the delinquency date;

(8) explain the payment option and discounts provided by Sections 31.03 and 31.05, if available to the taxing unit's taxpayers, and state the date on which each of the discount periods provided by Section 31.05 concludes, if the discounts are available;

(9) state the rates of penalty and interest imposed for delinquent payment of the tax;

(10) include the name and telephone number of the assessor for the taxing unit and, if different, of the collector for the taxing unit;

(11) for real property, state for the current tax year and each of the preceding five tax years:

(A) the appraised value and taxable value of the property;

(B) the total tax rate for the taxing unit;

(C) the amount of taxes imposed on the property by the taxing unit; and

(D) the difference, expressed as a percent increase or decrease, as applicable, in the amount of taxes imposed on the property by the taxing unit compared to the amount imposed for the preceding tax year; and

(12) for real property, state the differences, expressed as a percent increase or decrease, as applicable, in the following for the current tax year as compared to the fifth tax year before that tax year:

(A) the appraised value and taxable value of the property;

(B) the total tax rate for the taxing unit; and

(C) the amount of taxes imposed on the property by the taxing unit.

SECTION 1.07. Section 41.41(a), Tax Code, is amended to read as follows:

(a) A property owner is entitled to protest before the appraisal review board the following actions:

(1) determination of the appraised value of the owner's property or, in the case of land appraised as provided by Subchapter C, D, E, or H, Chapter 23, determination of its appraised or market value;

(2) unequal appraisal of the owner's property;

(3) inclusion of the owner's property on the appraisal records;

(4) denial to the property owner in whole or in part of a partial exemption;

(5) determination that the owner's land does not qualify for appraisal as provided by Subchapter C, D, E, or H, Chapter 23;

(6) identification of the taxing units in which the owner's property is taxable in the case of the appraisal district's appraisal roll;

(7) determination that the property owner is the owner of property; or

(8) [a determination that a change in use of land appraised under Subchapter C, D, E, or H, Chapter 23, has occurred; or

[(9)] any other action of the chief appraiser, appraisal district, or appraisal review board that applies to and adversely affects the property owner.

SECTION 1.08. Sections 41.44(a) and (c), Tax Code, are amended to read as follows:

(a) Except as provided by Subsections (b), (c), (c-1), and (c-2), to be entitled to a hearing and determination of a protest, the property owner initiating the protest must file a written notice of the protest with the appraisal review board having authority to hear the matter protested:

(1) not later than May 15 or the 30th day after the date that notice to the property owner was delivered to the property owner as provided by Section 25.19, whichever is later;

(2) in the case of a protest of a change in the appraisal records ordered as provided by Subchapter A of this chapter or by Chapter 25, not later than the 30th day after the date notice of the change is delivered to the property owner;

(3) [in the case of a determination that a change in the use of land appraised under Subchapter C, D, E, or H, Chapter 23, has occurred, not later than the 30th day after the date the notice of the determination is delivered to the property owner;

[(4)] in the case of a determination of eligibility for a refund under Section 23.1243, not later than the 30th day after the date the notice of the determination is delivered to the property owner; or

(4) [(5)] in the case of a protest of the modification or denial of an application for an exemption under Section 11.35, or the determination of an appropriate damage assessment rating for an item of qualified property under that section, not later than the 30th day after the date the property owner receives the notice required under Section 11.45(e).

(c) A property owner who files notice of a protest authorized by Section 41.411 is entitled to a hearing and determination of the protest if the property owner files the notice prior to the date the taxes on the property to which the notice applies become delinquent. [An owner of land who files a notice of protest under Subsection (a)(3) is entitled to a hearing and determination of the protest without regard to whether the appraisal records are approved.]

SECTION 1.09. Section 60.022, Agriculture Code, is amended to read as follows:

Sec. 60.022. CONTENTS OF PETITION. A petition filed under Section 60.021 must:

(1) describe the boundaries of the proposed district by metes and bounds or by lot and block number, if there is a recorded map or plat and survey of the area;

(2) include a name for the proposed district, which must include the term "Agricultural Development District";

(3) be signed by the landowners of any land to be included within the proposed district and provide an acknowledgment consistent with Section 121.001, Civil Practice and Remedies Code, that the landowners desire the land to be included in the district;

(4) include the names of at least five persons who are willing and qualified to serve as temporary directors of the district;

(5) name each county in which any agricultural facilities to be owned by the district are to be located;

(6) name each municipality in which any part of the district is to be located;

(7) state the general nature of the proposed development and the cost of the development as then estimated by the petitioners;

(8) state the necessity and feasibility of the proposed district and whether the district will serve the public purpose of furthering agricultural interests;

(9) include a pledge that the district will make payments in lieu of taxes to any school district and county in which any real property to be owned by the district is located, in [as follows:

[(A)] annual payments to each entity that are equal to the amount of taxes imposed on the real property by the entity in the year of the district's creation; and

[(B) a payment to each entity equal to the amount that would be due under Section 23.55, Tax Code, on the district's date of creation; and]

(10) include a pledge that, if the district employs more than 50 persons, the district will make payments in lieu of taxes to any school district, in addition to those made under Subdivision (9), in an amount negotiated between the district and the school district.

SECTION 1.10. Section 21.0421(e), Property Code, is amended to read as follows:

(e) This section does not[:

[(1)] authorize groundwater rights appraised separately from the real property under this section to be appraised separately from real property for property tax appraisal purposes[; or

[(2) subject real property condemned for the purpose described by Subsection (a) to an additional tax as provided by Section 23.46 or 23.55, Tax Code].

SECTION 1.11. Subsection (a), Section 23.46, Tax Code, is transferred to Section 23.41, Tax Code, and redesignated as Subsection (c), Section 23.41, Tax Code.

SECTION 1.12. The following provisions of the Tax Code are repealed:

(1) Section 23.20(g);

(2) the heading to Section 23.46;

(3) Sections 23.46(b), (c), (d), (e), and (f);

(4) Sections 23.46(e-1) and (g), as added by S.B. No. 725, Acts of the 87th Legislature, Regular Session, 2021, and effective September 1, 2021;

(5) Sections 23.47(c) and (d);

(6) Section 23.55;

(7) Sections 23.58(c) and (d);

(8) Section 23.76;

(9) Section 23.86;

(10) Section 23.96; and

(11) Section 23.9807.

SECTION 1.13. The repeal of Sections 23.46, 23.55, 23.76, 23.86, 23.96, and 23.9807, Tax Code, by this Act does not affect an additional tax imposed as a result of a sale or change of use of land appraised under Subchapter C, D, E, F, G, or H, Chapter 23, Tax Code, that occurred before the effective date of this Act, and the former law is continued in effect for purposes of that tax.

ARTICLE 2. REPEAL OF ADDITIONAL TAX PROVISIONS IN SUBCHAPTERS D, E,

F, G, AND H, CHAPTER 23, TAX CODE

SECTION 2.01. Section 1.07(d), Tax Code, is amended to read as follows:

(d) A notice required by Section 11.43(q), 11.45(d), 23.44(d), 23.46(c) or (f), 23.54(e), 23.541(c), [23.55(e),] 23.551(a), 23.57(d), [23.76(e),] 23.79(d), or 23.85(d) must be sent by certified mail.

SECTION 2.02. Section 23.20(g), Tax Code, is amended to read as follows:

(g) A waiver of a special appraisal of property under Subchapter C[, D, E, F, or G of this chapter] does not constitute a change of use of the property or diversion of the property to another use for purposes of the imposition of additional taxes under that subchapter [any of those subchapters].

SECTION 2.03. Section 23.52(e), Tax Code, is amended to read as follows:

(e) The [For the purposes of Section 23.55 of this code, the] chief appraiser [also] shall determine the market value of qualified open-space land and shall record both the market value and the appraised value in the appraisal records.

SECTION 2.04. Section 23.524(e), Tax Code, is amended to read as follows:

(e) Notwithstanding Subsection (b) or (c), the eligibility of [For the purposes of this subchapter, a change of use of the] land subject to this section for appraisal under this subchapter is considered to have ended [occurred] on the day the period prescribed by Subsection (c) begins if the owner has not fully complied with the terms of the agreement described by Subsection (b) on the date the agreement ends.

SECTION 2.05. Sections 23.551(a) and (d), Tax Code, are amended to read as follows:

(a) If land appraised as provided by this subchapter is owned by an individual 65 years of age or older, before making a determination that [a change in use of] the land is no longer eligible for appraisal under this subchapter [has occurred], the chief appraiser shall deliver a written notice to the owner stating that the chief appraiser believes [a change in use of] the land may no longer be eligible for appraisal under this subchapter [have occurred].

(d) If the chief appraiser does not receive a response on or before the 60th day after the date the notice is mailed, the chief appraiser must make a reasonable effort to locate the owner and determine whether the land remains eligible to be appraised as provided by this subchapter before determining that [a change in use of] the land is no longer eligible for appraisal under this subchapter [has occurred].

SECTION 2.06. Section 23.73(c), Tax Code, is amended to read as follows:

(c) The [For the purposes of Section 23.76 of this code, the] chief appraiser [also] shall determine the market value of qualified timber land and shall record both the market value and the appraised value in the appraisal records.

SECTION 2.07. Sections 31.01(c) and (c-1), Tax Code, are amended to read as follows:

(c) The tax bill or a separate statement accompanying the tax bill shall:

(1) identify the property subject to the tax;

(2) state the appraised value, assessed value, and taxable value of the property;

(3) if the property is land appraised as provided by Subchapter C, [D, E, or H,] Chapter 23, state the market value and the taxable value for purposes of deferred or additional taxation as provided by Section 23.46[, 23.55, 23.76, or 23.9807, as applicable];

(4) if the property is land appraised as provided by Subchapter D, E, or H, Chapter 23, state the market value of the land;

(5) state the assessment ratio for the taxing unit;

(6) [(5)] state the type and amount of any partial exemption applicable to the property, indicating whether it applies to appraised or assessed value;

(7) [(6)] state the total tax rate for the taxing unit;

(8) [(7)] state the amount of tax due, the due date, and the delinquency date;

(9) [(8)] explain the payment option and discounts provided by Sections 31.03 and 31.05, if available to the taxing unit's taxpayers, and state the date on which each of the discount periods provided by Section 31.05 concludes, if the discounts are available;

(10) [(9)] state the rates of penalty and interest imposed for delinquent payment of the tax;

(11) [(10)] include the name and telephone number of the assessor for the taxing unit and, if different, of the collector for the taxing unit;

(12) [(11)] for real property, state for the current tax year and each of the preceding five tax years:

(A) the appraised value and taxable value of the property;

(B) the total tax rate for the taxing unit;

(C) the amount of taxes imposed on the property by the taxing unit; and

(D) the difference, expressed as a percent increase or decrease, as applicable, in the amount of taxes imposed on the property by the taxing unit compared to the amount imposed for the preceding tax year; and

(13) [(12)] for real property, state the differences, expressed as a percent increase or decrease, as applicable, in the following for the current tax year as compared to the fifth tax year before that tax year:

(A) the appraised value and taxable value of the property;

(B) the total tax rate for the taxing unit; and

(C) the amount of taxes imposed on the property by the taxing unit.

(c-1) If for any of the preceding six tax years any information required by Subsection (c)(12) [(c)(11)] or (13) [(12)] to be included in a tax bill or separate statement is unavailable, the tax bill or statement must state that the information is not available for that year.

SECTION 2.08. Section 41.41(a), Tax Code, is amended to read as follows:

(a) A property owner is entitled to protest before the appraisal review board the following actions:

(1) determination of the appraised value of the owner's property or, in the case of land appraised as provided by Subchapter C, D, E, or H, Chapter 23, determination of its appraised or market value;

(2) unequal appraisal of the owner's property;

(3) inclusion of the owner's property on the appraisal records;

(4) denial to the property owner in whole or in part of a partial exemption;

(5) determination that the owner's land does not qualify for appraisal as provided by Subchapter C, D, E, or H, Chapter 23;

(6) identification of the taxing units in which the owner's property is taxable in the case of the appraisal district's appraisal roll;

(7) determination that the property owner is the owner of property;

(8) a determination that a change in use of land appraised under Subchapter C, [D, E, or H,] Chapter 23, has occurred; or

(9) any other action of the chief appraiser, appraisal district, or appraisal review board that applies to and adversely affects the property owner.

SECTION 2.09. Section 41.44(a), Tax Code, is amended to read as follows:

(a) Except as provided by Subsections (b), (c), (c-1), and (c-2), to be entitled to a hearing and determination of a protest, the property owner initiating the protest must file a written notice of the protest with the appraisal review board having authority to hear the matter protested:

(1) not later than May 15 or the 30th day after the date that notice to the property owner was delivered to the property owner as provided by Section 25.19, whichever is later;

(2) in the case of a protest of a change in the appraisal records ordered as provided by Subchapter A of this chapter or by Chapter 25, not later than the 30th day after the date notice of the change is delivered to the property owner;

(3) in the case of a determination that a change in the use of land appraised under Subchapter C, [D, E, or H,] Chapter 23, has occurred, not later than the 30th day after the date the notice of the determination is delivered to the property owner;

(4) in the case of a determination of eligibility for a refund under Section 23.1243, not later than the 30th day after the date the notice of the determination is delivered to the property owner; or

(5) in the case of a protest of the modification or denial of an application for an exemption under Section 11.35, or the determination of an appropriate damage assessment rating for an item of qualified property under that section, not later than the 30th day after the date the property owner receives the notice required under Section 11.45(e).

SECTION 2.10. Section 60.022, Agriculture Code, is amended to read as follows:

Sec. 60.022. CONTENTS OF PETITION. A petition filed under Section 60.021 must:

(1) describe the boundaries of the proposed district by metes and bounds or by lot and block number, if there is a recorded map or plat and survey of the area;

(2) include a name for the proposed district, which must include the term "Agricultural Development District";

(3) be signed by the landowners of any land to be included within the proposed district and provide an acknowledgment consistent with Section 121.001, Civil Practice and Remedies Code, that the landowners desire the land to be included in the district;

(4) include the names of at least five persons who are willing and qualified to serve as temporary directors of the district;

(5) name each county in which any agricultural facilities to be owned by the district are to be located;

(6) name each municipality in which any part of the district is to be located;

(7) state the general nature of the proposed development and the cost of the development as then estimated by the petitioners;

(8) state the necessity and feasibility of the proposed district and whether the district will serve the public purpose of furthering agricultural interests;

(9) include a pledge that the district will make payments in lieu of taxes to any school district and county in which any real property to be owned by the district is located, in [as follows:

[(A)] annual payments to each entity that are equal to the amount of taxes imposed on the real property by the entity in the year of the district's creation; and

[(B) a payment to each entity equal to the amount that would be due under Section 23.55, Tax Code, on the district's date of creation; and]

(10) include a pledge that, if the district employs more than 50 persons, the district will make payments in lieu of taxes to any school district, in addition to those made under Subdivision (9), in an amount negotiated between the district and the school district.

SECTION 2.11. Section 21.0421(e), Property Code, is amended to read as follows:

(e) This section does not:

(1) authorize groundwater rights appraised separately from the real property under this section to be appraised separately from real property for property tax appraisal purposes; or

(2) subject real property condemned for the purpose described by Subsection (a) to an additional tax as provided by Section 23.46 [or 23.55], Tax Code.

SECTION 2.12. The following provisions of the Tax Code are repealed:

(1) Section 23.55;

(2) Sections 23.58(c) and (d);

(3) Section 23.76;

(4) Section 23.86;

(5) Section 23.96; and

(6) Section 23.9807.

SECTION 2.13. The repeal of Sections 23.55, 23.76, 23.86, 23.96, and 23.9807, Tax Code, by this Act does not affect an additional tax imposed as a result of a change of use of land appraised under Subchapter D, E, F, G, or H, Chapter 23, Tax Code, that occurred before the effective date of this Act, and the former law is continued in effect for purposes of that tax.

ARTICLE 3. EFFECTIVE DATE

SECTION 3.01. (a) Except as otherwise provided by this section, this Act takes effect January 1, 2022.

(b) Article 1 of this Act takes effect only if the constitutional amendment proposed by the 87th Legislature, 1st Called Session, 2021, repealing the provision that subjects land designated for agricultural use to an additional tax when the land is diverted to a purpose other than agricultural use or sold is approved by the voters. If that amendment is not approved by the voters, Article 1 of this Act has no effect.

(c) Article 2 of this Act takes effect only if Article 1 of this Act does not take effect. If Article 1 of this Act takes effect, Article 2 of this Act has no effect.