LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION April 21, 2013 TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2231 by Simmons (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as open space land if a change in use of the land occurs.), As Introduced The bill's language would prevent situations in which a landowner avoids the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use by conveying land to an entity that is exempt from the sanctions and then reacquiring the land. In these situations the bill would create a gain to the state through the operation of the school finance formulas. Information regarding the additional acres of land to which the sanctions would be applied is not available. The bill would amend Section 23.55, Tax Code, to specify that a property owner is subject to the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use if the property owner or the property owner's subsidiary, affiliate, and/or another person acting in concert with the property owner: 1) conveys qualified open-space land to an entity that changes the use of the land but is not subject to the standard legal sanctions for such change of use; and 2) regains possession of the land and uses the land in a way that would have triggered the sanctions if the change of use had occurred before the conveyance. The date of a change in use that results in an imposition of the sanctions would be the date of the conveyance. The bill's language would prevent situations in which a landowner avoids the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use by conveying land to an entity that is exempt from the sanctions and then reacquiring the land. In these situations the bill would create a gain to local taxing units and to the state through the operation of the school finance formulas. No information is available regarding the additional acres of land to which the sanctions would be applied under the bill. Consequently, the fiscal gain cannot be estimated. This bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2013. Local Government Impact The bill's language would prevent situations in which a landowner avoids the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use by conveying land to an entity that is exempt from the sanctions and then reacquiring the land. In these situations the bill would create a gain to local taxing units. Source Agencies:304 Comptroller of Public Accounts LBB Staff: UP, KK, SD, SJS
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION
April 21, 2013
TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB2231 by Simmons (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as open space land if a change in use of the land occurs.), As Introduced
TO: Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB2231 by Simmons (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as open space land if a change in use of the land occurs.), As Introduced
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
Honorable Harvey Hilderbran, Chair, House Committee on Ways & Means
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB2231 by Simmons (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as open space land if a change in use of the land occurs.), As Introduced
HB2231 by Simmons (Relating to the additional tax imposed on land appraised for ad valorem tax purposes as open space land if a change in use of the land occurs.), As Introduced
The bill's language would prevent situations in which a landowner avoids the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use by conveying land to an entity that is exempt from the sanctions and then reacquiring the land. In these situations the bill would create a gain to the state through the operation of the school finance formulas. Information regarding the additional acres of land to which the sanctions would be applied is not available.
The bill's language would prevent situations in which a landowner avoids the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use by conveying land to an entity that is exempt from the sanctions and then reacquiring the land. In these situations the bill would create a gain to the state through the operation of the school finance formulas. Information regarding the additional acres of land to which the sanctions would be applied is not available.
The bill's language would prevent situations in which a landowner avoids the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use by conveying land to an entity that is exempt from the sanctions and then reacquiring the land. In these situations the bill would create a gain to the state through the operation of the school finance formulas.
Information regarding the additional acres of land to which the sanctions would be applied is not available.
The bill would amend Section 23.55, Tax Code, to specify that a property owner is subject to the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use if the property owner or the property owner's subsidiary, affiliate, and/or another person acting in concert with the property owner: 1) conveys qualified open-space land to an entity that changes the use of the land but is not subject to the standard legal sanctions for such change of use; and 2) regains possession of the land and uses the land in a way that would have triggered the sanctions if the change of use had occurred before the conveyance. The date of a change in use that results in an imposition of the sanctions would be the date of the conveyance. The bill's language would prevent situations in which a landowner avoids the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use by conveying land to an entity that is exempt from the sanctions and then reacquiring the land. In these situations the bill would create a gain to local taxing units and to the state through the operation of the school finance formulas. No information is available regarding the additional acres of land to which the sanctions would be applied under the bill. Consequently, the fiscal gain cannot be estimated. This bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2013.
Local Government Impact
The bill's language would prevent situations in which a landowner avoids the legal sanctions requiring the payment of additional taxes, penalty, and interest when the use of land is changed from a qualifying open-space use to a non-qualifying use by conveying land to an entity that is exempt from the sanctions and then reacquiring the land. In these situations the bill would create a gain to local taxing units.
Source Agencies: 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: UP, KK, SD, SJS
UP, KK, SD, SJS