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A BILL TO BE ENTITLED
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AN ACT
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relating to the appraisal of certain real property for ad valorem |
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tax purposes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 23.215, Tax Code, is amended to read as |
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follows: |
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Sec. 23.215. APPRAISAL OF CERTAIN NONEXEMPT PROPERTY USED |
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FOR LOW-INCOME OR MODERATE-INCOME HOUSING. (a) This section |
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applies only to real property owned by an organization: |
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(1) for the purpose of renting the property [that on |
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the effective date of this section was rented] to a low-income or |
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moderate-income individual or family satisfying the organization's |
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income eligibility requirements [and that continues to be used for |
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that purpose]; |
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(2) that is or will be [was] financed under the low |
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income housing tax credit program under Subchapter DD, Chapter |
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2306, Government Code, and subject to a land use restriction |
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agreement under that subchapter; |
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(3) that does not receive an exemption under Section |
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11.182 or 11.1825; and |
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(4) the owner of which has not entered into an |
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agreement with any taxing unit to make payments to the taxing unit |
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instead of taxes on the property. |
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(b) In appraising property that is under construction or |
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that has not reached stabilized occupancy on January 1 of the tax |
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year in which the property is appraised, the [The] chief appraiser |
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shall determine the value of [appraise] the property in the manner |
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provided by Section 11.1825(q) using the property's projected |
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income and expenses for the first full year of operation as |
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established and utilized in the underwriting report pertaining to |
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the property prepared by the Texas Department of Housing and |
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Community Affairs under Subchapter DD, Chapter 2306, Government |
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Code, and adjust that value as provided by this subsection to |
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determine the appraised value of the property. For a property under |
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construction on January 1, the chief appraiser shall adjust the |
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value to reflect the percentage of the construction that is |
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complete on January 1. For a property on which construction is |
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complete but that has not reached stabilized occupancy on January |
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1, the chief appraiser shall adjust the value to reflect the actual |
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occupancy of the property on January 1. For purposes of this |
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subsection, a property is not considered to be under construction |
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if the purpose of the work being performed on the property is the |
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maintenance or rehabilitation of the property. |
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(c) In appraising property for the first tax year following |
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the year in which construction on the property is complete and |
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occupancy of the property has stabilized and any tax year |
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subsequent to that year, the chief appraiser shall determine the |
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appraised value of the property in the manner provided by Section |
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11.1825(q). |
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SECTION 2. 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 years preceding the year in which the change of |
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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 five 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 |
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become delinquent and incur penalties and interest as provided by |
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law for ad valorem taxes imposed by the taxing unit if not paid |
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before the next February 1 that is at least 20 days after the date |
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the bill is 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 3. 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 |
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protect the lender from loss because of the imposition of |
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additional taxes [and interest] under Section 23.55 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 4. 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 years preceding the year in which the change of |
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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 five 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 5. Sections 23.86(a) and (b), Tax Code, are amended |
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to read as follows: |
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(a) If land that has been appraised under this subchapter is |
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no longer subject to a deed restriction or is diverted to a use |
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other than recreational, park, or scenic uses, an additional tax is |
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imposed on the land equal to the difference between the taxes |
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imposed on the land for each of the three [five] years preceding the |
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year in which the change of use occurs or the deed restriction |
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expires that the land was appraised as provided by this subchapter |
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and the tax that would have been imposed had the land not been |
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restricted to recreational, park, or scenic uses in each of those |
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years[, plus interest at an annual rate of seven percent calculated |
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from the 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 or the deed restriction expires to secure payment of the |
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additional tax [and interest] imposed by 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 6. Sections 23.96(a) and (b), Tax Code, are amended |
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to read as follows: |
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(a) If airport property that has been appraised under this |
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subchapter is no longer subject to a deed restriction, an |
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additional tax is imposed on the property equal to the difference |
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between the taxes imposed on the property for each of the three |
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[five] years preceding the year in which the deed restriction |
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expires that the property was appraised as provided by this |
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subchapter and the tax that would have been imposed had the property |
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not been restricted to use as public access airport property in each |
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of those years[, plus 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) A tax lien attaches to the property on the date the deed |
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restriction expires to secure payment of the additional tax [and |
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interest] imposed by this section and any penalties and interest |
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incurred if the tax becomes delinquent. The lien exists in favor of |
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all taxing units for which the additional tax is imposed. |
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SECTION 7. 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 |
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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 8. The change in law made by Section 23.215, Tax |
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Code, as amended by this Act, applies only to an ad valorem tax year |
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that begins on or after January 1, 2022. |
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SECTION 9. Section 23.55, Tax Code, as amended by this Act, |
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applies only to a change of use of land appraised under Subchapter |
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D, Chapter 23, Tax Code, that occurs on or after the effective date |
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of this Act. |
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SECTION 10. Section 23.58, Tax Code, as amended by this Act, |
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applies only to a loan secured by a lien on open-space land that is |
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contracted for on or after the effective date of this Act. |
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SECTION 11. Section 23.76, Tax Code, as amended by this Act, |
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applies only to a change of use of land appraised under Subchapter |
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E, Chapter 23, Tax Code, that occurs on or after the effective date |
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of this Act. |
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SECTION 12. Section 23.86, Tax Code, as amended by this Act, |
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applies only to a change of use of land appraised under Subchapter |
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F, Chapter 23, Tax Code, that occurs on or after the effective date |
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of this Act. |
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SECTION 13. Section 23.96, Tax Code, as amended by this Act, |
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applies only to a change of use of land appraised under Subchapter |
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G, Chapter 23, Tax Code, that occurs on or after the effective date |
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of this Act. |
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SECTION 14. Section 23.9807, Tax Code, as amended by this |
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Act, applies only to a change of use of land appraised under |
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Subchapter H, Chapter 23, Tax Code, that occurs on or after the |
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effective date of this Act. |
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SECTION 15. This Act takes effect immediately if it |
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receives a vote of two-thirds of all the members elected to each |
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house, as provided by Section 39, Article III, Texas Constitution. |
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If this Act does not receive the vote necessary for immediate |
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effect, this Act takes effect September 1, 2021. |
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* * * * * |