Texas Senate Bill SB434

Texas 2019 - 86th Regular

Caption

Relating to the effect of a sale of property on the tax lien on the property to secure the payment of ad valorem taxes, penalties, and interest imposed on the property as a result of the addition to the appraisal roll of property or appraised value that was erroneously exempted in a prior year.

Impact

If enacted, SB434 would prevent tax liens from being enforced for ad valorem taxes, penalties, and interest for properties sold under specific conditions. This would offer significant protection to property buyers who might otherwise inherit tax debts due to past exemptions that were incorrectly applied. The bill is dependent on the approval of a constitutional amendment related to this matter, which means its implementation would also require voter consent. Therefore, the overall impact of the bill hinges on public support for this amendment.

Summary

SB434 seeks to address the implications of sales of property concerning ad valorem taxes when those properties were previously erroneously exempted from taxation. The bill proposes that if property or appraised value, which was mistakenly exempted in prior years, is added to the appraised roll, no tax liens can be enforced against the property if it was sold in an arm's-length transaction after January 1 of the applicable year. This change is aimed at protecting buyers of such property from unexpected tax liabilities that may have arisen due to administrative errors in previous tax assessments.

Contention

There may be notable points of contention regarding SB434, particularly about the fairness of protecting buyers from inherited tax liabilities at the expense of tax revenue intended for local governments. Stakeholders could express concerns about the ramifications on local funding if properties revert to being untaxed due to sales that do not account for past discrepancies. The balance between protecting property buyers and ensuring adequate funding through property taxes will likely be a focal point in discussions surrounding this bill.