Texas 2021 - 87th Regular

Texas House Bill HB3833 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 3833
	1	+	By: King of Parker, et al. H.B. No. 3833
	2	+	(Senate Sponsor - Hancock)
	3	+	(In the Senate - Received from the House May 10, 2021;
	4	+	May 12, 2021, read first time and referred to Committee on Local
	5	+	Government; May 20, 2021, reported favorably by the following
	6	+	vote: Yeas 6, Nays 0; May 20, 2021, sent to printer.)
	7	+	Click here to see the committee vote
2	8
3	9
	10	+	A BILL TO BE ENTITLED
4	11		AN ACT
5	12		relating to the appraisal of certain real property for ad valorem
6	13		tax purposes.
7	14		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	15		SECTION 1. Section 23.215, Tax Code, is amended to read as
9	16		follows:
10	17		Sec. 23.215. APPRAISAL OF CERTAIN NONEXEMPT PROPERTY USED
11	18		FOR LOW-INCOME OR MODERATE-INCOME HOUSING. (a) This section
12	19		applies only to real property owned by an organization:
13	20		(1) for the purpose of renting the property [that on
14	21		the effective date of this section was rented] to a low-income or
15	22		moderate-income individual or family satisfying the organization's
16	23		income eligibility requirements [and that continues to be used for
17	24		that purpose];
18	25		(2) that is or will be [was] financed under the low
19	26		income housing tax credit program under Subchapter DD, Chapter
20	27		2306, Government Code, and subject to a land use restriction
21	28		agreement under that subchapter;
22	29		(3) that does not receive an exemption under Section
23	30		11.182 or 11.1825; and
24	31		(4) the owner of which has not entered into an
25	32		agreement with any taxing unit to make payments to the taxing unit
26	33		instead of taxes on the property.
27	34		(b) In appraising property that is under construction or
28	35		that has not reached stabilized occupancy on January 1 of the tax
29	36		year in which the property is appraised, the [The] chief appraiser
30	37		shall determine the value of [appraise] the property in the manner
31	38		provided by Section 11.1825(q) using the property's projected
32	39		income and expenses for the first full year of operation as
33	40		established and utilized in the underwriting report pertaining to
34	41		the property prepared by the Texas Department of Housing and
35	42		Community Affairs under Subchapter DD, Chapter 2306, Government
36	43		Code, and adjust that value as provided by this subsection to
37	44		determine the appraised value of the property. For a property under
38	45		construction on January 1, the chief appraiser shall adjust the
39	46		value to reflect the percentage of the construction that is
40	47		complete on January 1. For a property on which construction is
41	48		complete but that has not reached stabilized occupancy on January
42	49		1, the chief appraiser shall adjust the value to reflect the actual
43	50		occupancy of the property on January 1. For purposes of this
44	51		subsection, a property is not considered to be under construction
45	52		if the purpose of the work being performed on the property is the
46	53		maintenance or rehabilitation of the property.
47	54		(c) In appraising property for the first tax year following
48	55		the year in which construction on the property is complete and
49	56		occupancy of the property has stabilized and any tax year
50	57		subsequent to that year, the chief appraiser shall determine the
51	58		appraised value of the property in the manner provided by Section
52	59		11.1825(q).
53	60		SECTION 2. Sections 23.55(a), (b), (e), (f), (m), and (n),
54	61		Tax Code, are amended to read as follows:
55	62		(a) If the use of land that has been appraised as provided by
56	63		this subchapter changes, an additional tax is imposed on the land
57	64		equal to the difference between the taxes imposed on the land for
58	65		each of the three years preceding the year in which the change of
59	66		use occurs that the land was appraised as provided by this
60	67		subchapter and the tax that would have been imposed had the land
61	68		been taxed on the basis of market value in each of those years[,
62	69		plus interest at an annual rate of five percent calculated from the
63	70		dates on which the differences would have become due]. For purposes
64	71		of this subsection, the chief appraiser may not consider any period
65	72		during which land is owned by the state in determining whether a
66	73		change in the use of the land has occurred.
67	74		(b) A tax lien attaches to the land on the date the change of
68	75		use occurs to secure payment of the additional tax [and interest]
69	76		imposed by this section and any penalties and interest incurred if
70	77		the tax becomes delinquent. The lien exists in favor of all taxing
71	78		units for which the additional tax is imposed.
72	79		(e) Subject to Section 23.551, a determination that a change
73	80		in use of the land has occurred is made by the chief appraiser. The
74	81		chief appraiser shall deliver a notice of the determination to the
75	82		owner of the land as soon as possible after making the determination
76	83		and shall include in the notice an explanation of the owner's right
77	84		to protest the determination. If the owner does not file a timely
78	85		protest or if the final determination of the protest is that the
79	86		additional taxes are due, the assessor for each taxing unit shall
80	87		prepare and deliver a bill for the additional taxes [plus interest]
81	88		as soon as practicable. The taxes [and interest] are due and
82	89		become delinquent and incur penalties and interest as provided by
83	90		law for ad valorem taxes imposed by the taxing unit if not paid
84	91		before the next February 1 that is at least 20 days after the date
85	92		the bill is delivered to the owner of the land.
86	93		(f) The sanctions provided by Subsection (a) [of this
87	94		section] do not apply if the change of use occurs as a result of:
88	95		(1) a sale for right-of-way;
89	96		(2) a condemnation;
90	97		(3) a transfer of the property to the state or a
91	98		political subdivision of the state to be used for a public purpose;
92	99		or
93	100		(4) a transfer of the property from the state, a
94	101		political subdivision of the state, or a nonprofit corporation
95	102		created by a municipality with a population of more than one million
96	103		under the Development Corporation Act (Subtitle C1, Title 12, Local
97	104		Government Code) to an individual or a business entity for purposes
98	105		of economic development if the comptroller determines that the
99	106		economic development is likely to generate for deposit in the
100	107		general revenue fund during the next two fiscal bienniums an amount
101	108		of taxes and other revenues that equals or exceeds 20 times the
102	109		amount of additional taxes [and interest] that would have been
103	110		imposed under Subsection (a) had the sanctions provided by that
104	111		subsection applied to the transfer.
105	112		(m) For purposes of determining whether a transfer of land
106	113		qualifies for the exemption from additional taxes provided by
107	114		Subsection (f)(4), on an application of the entity transferring or
108	115		proposing to transfer the land or of the individual or entity to
109	116		which the land is transferred or proposed to be transferred, the
110	117		comptroller shall determine the amount of taxes and other revenues
111	118		likely to be generated as a result of the economic development for
112	119		deposit in the general revenue fund during the next two fiscal
113	120		bienniums. If the comptroller determines that the amount of those
114	121		revenues is likely to equal or exceed 20 times the amount of
115	122		additional taxes [and interest] that would be imposed under
116	123		Subsection (a) if the sanctions provided by that subsection applied
117	124		to the transfer, the comptroller shall issue a letter to the
118	125		applicant stating the comptroller's determination and shall send a
119	126		copy of the letter by regular mail to the chief appraiser.
120	127		(n) Within one year of the conclusion of the two fiscal
121	128		bienniums for which the comptroller issued a letter as provided
122	129		under Subsection (m), the board of directors of the appraisal
123	130		district, by official board action, may direct the chief appraiser
124	131		to request the comptroller to determine if the amount of revenues
125	132		was equal to or exceeded 20 times the amount of taxes [and interest]
126	133		that would have been imposed under Subsection (a). The comptroller
127	134		shall issue a finding as to whether the amount of revenue met the
128	135		projected increases. The chief appraiser shall review the results
129	136		of the comptroller's finding and shall make a determination as to
130	137		whether sanctions under Subsection (a) should be imposed. If the
131	138		chief appraiser determines that the sanctions provided by
132	139		Subsection (a) shall be imposed, the sanctions shall be based on the
133	140		date of the transfer of the property under Subsection (f)(4).
134	141		SECTION 3. Sections 23.58(c) and (d), Tax Code, are amended
135	142		to read as follows:
136	143		(c) A provision in an instrument pertaining to a loan
137	144		secured by a lien in favor of the lender on land appraised according
138	145		to this subchapter that requires the borrower to make a payment to
139	146		protect the lender from loss because of the imposition of
140	147		additional taxes [and interest] under Section 23.55 is void unless
141	148		the provision:
142	149		(1) requires the borrower to pay into an escrow
143	150		account established by the lender an amount equal to the additional
144	151		taxes [and interest] that would be due under Section 23.55 if a
145	152		change of use occurred on January 1 of the year in which the loan is
146	153		granted or amended;
147	154		(2) requires the escrow account to bear interest to be
148	155		credited to the account monthly;
149	156		(3) permits the lender to apply money in the escrow
150	157		account to the payment of a bill for additional taxes [and interest]
151	158		under Section 23.55 before the loan is paid and requires the lender
152	159		to refund the balance remaining in the escrow account after the bill
153	160		is paid to the borrower; and
154	161		(4) requires the lender to refund the money in the
155	162		escrow account to the borrower on the payment of the loan.
156	163		(d) On the request of the borrower or the borrower's
157	164		representative, the assessor for each taxing unit shall compute the
158	165		additional taxes [and interest] that would be due that taxing unit
159	166		under Section 23.55 if a change of use occurred on January 1 of the
160	167		year in which the loan is granted or amended. The assessor may
161	168		charge a reasonable fee not to exceed the actual cost of making the
162	169		computation.
163	170		SECTION 4. Sections 23.76(a), (b), and (e), Tax Code, are
164	171		amended to read as follows:
165	172		(a) If the use of land that has been appraised as provided by
166	173		this subchapter changes, an additional tax is imposed on the land
167	174		equal to the difference between the taxes imposed on the land for
168	175		each of the three years preceding the year in which the change of
169	176		use occurs that the land was appraised as provided by this
170	177		subchapter and the tax that would have been imposed had the land
171	178		been taxed on the basis of market value in each of those years[,
172	179		plus interest at an annual rate of five percent calculated from the
173	180		dates on which the differences would have become due].
174	181		(b) A tax lien attaches to the land on the date the change of
175	182		use occurs to secure payment of the additional tax [and interest]
176	183		imposed by this section and any penalties and interest incurred if
177	184		the tax becomes delinquent. The lien exists in favor of all taxing
178	185		units for which the additional tax is imposed.
179	186		(e) A determination that a change in use of the land has
180	187		occurred is made by the chief appraiser. The chief appraiser shall
181	188		deliver a notice of the determination to the owner of the land as
182	189		soon as possible after making the determination and shall include
183	190		in the notice an explanation of the owner's right to protest the
184	191		determination. If the owner does not file a timely protest or if
185	192		the final determination of the protest is that the additional taxes
186	193		are due, the assessor for each taxing unit shall prepare and deliver
187	194		a bill for the additional taxes [and interest] as soon as
188	195		practicable after the change of use occurs. The taxes [and
189	196		interest] are due and become delinquent and incur penalties and
190	197		interest as provided by law for ad valorem taxes imposed by the
191	198		taxing unit if not paid before the next February 1 that is at least
192	199		20 days after the date the bill is delivered to the owner of the
193	200		land.
194	201		SECTION 5. Sections 23.86(a) and (b), Tax Code, are amended
195	202		to read as follows:
196	203		(a) If land that has been appraised under this subchapter is
197	204		no longer subject to a deed restriction or is diverted to a use
198	205		other than recreational, park, or scenic uses, an additional tax is
199	206		imposed on the land equal to the difference between the taxes
200	207		imposed on the land for each of the three [five] years preceding the
201	208		year in which the change of use occurs or the deed restriction
202	209		expires that the land was appraised as provided by this subchapter
203	210		and the tax that would have been imposed had the land not been
204	211		restricted to recreational, park, or scenic uses in each of those
205	212		years[, plus interest at an annual rate of seven percent calculated
206	213		from the dates on which the differences would have become due].
207	214		(b) A tax lien attaches to the land on the date the change of
208	215		use occurs or the deed restriction expires to secure payment of the
209	216		additional tax [and interest] imposed by this section and any
210	217		penalties and interest incurred if the tax becomes delinquent. The
211	218		lien exists in favor of all taxing units for which the additional
212	219		tax is imposed.
213	220		SECTION 6. Sections 23.96(a) and (b), Tax Code, are amended
214	221		to read as follows:
215	222		(a) If airport property that has been appraised under this
216	223		subchapter is no longer subject to a deed restriction, an
217	224		additional tax is imposed on the property equal to the difference
218	225		between the taxes imposed on the property for each of the three
219	226		[five] years preceding the year in which the deed restriction
220	227		expires that the property was appraised as provided by this
221	228		subchapter and the tax that would have been imposed had the property
222	229		not been restricted to use as public access airport property in each
223	230		of those years[, plus interest at an annual rate of seven percent
224	231		calculated from the dates on which the differences would have
225	232		become due].
226	233		(b) A tax lien attaches to the property on the date the deed
227	234		restriction expires to secure payment of the additional tax [and
228	235		interest] imposed by this section and any penalties and interest
229	236		incurred if the tax becomes delinquent. The lien exists in favor of
230	237		all taxing units for which the additional tax is imposed.
231	238		SECTION 7. Sections 23.9807(a), (b), (c), and (f), Tax
232	239		Code, are amended to read as follows:
233	240		(a) If the use of land that has been appraised as provided by
234	241		this subchapter changes to a use that qualifies the land for
235	242		appraisal under Subchapter E, an additional tax is imposed on the
236	243		land equal to [the sum of:
237	244		[(1)] the difference between:
238	245		(1) [(A)] the taxes imposed on the land for each of the
239	246		three [five] years preceding the year in which the change of use
240	247		occurs that the land was appraised as provided by this subchapter;
241	248		and
242	249		(2) [(B)] the taxes that would have been imposed had
243	250		the land been appraised under Subchapter E in each of those years[;
244	251		and
245	252		[(2) interest at an annual rate of seven percent
246	253		calculated from the dates on which the differences would have
247	254		become due].
248	255		(b) If the use of land that has been appraised as provided by
249	256		this subchapter changes to a use that does not qualify the land for
250	257		appraisal under Subchapter E or under this subchapter, an
251	258		additional tax is imposed on the land equal to [the sum of:
252	259		[(1)] the difference between:
253	260		(1) [(A)] the taxes imposed on the land for each of the
254	261		three [five] years preceding the year in which the change of use
255	262		occurs that the land was appraised as provided by this subchapter;
256	263		and
257	264		(2) [(B)] the taxes that would have been imposed had
258	265		the land been taxed on the basis of market value in each of those
259	266		years[; and
260	267		[(2) interest at an annual rate of seven percent
261	268		calculated from the dates on which the differences would have
262	269		become due].
263	270		(c) A tax lien attaches to the land on the date the change of
264	271		use occurs to secure payment of the additional tax [and interest]
265	272		imposed by this section and any penalties and interest incurred if
266	273		the tax becomes delinquent. The lien exists in favor of all taxing
267	274		units for which the additional tax is imposed.
268	275		(f) A determination that a change in use of the land has
269	276		occurred is made by the chief appraiser. The chief appraiser shall
270	277		deliver a notice of the determination to the owner of the land as
271	278		soon as possible after making the determination and shall include
272	279		in the notice an explanation of the owner's right to protest the
273	280		determination. If the owner does not file a timely protest or if
274	281		the final determination of the protest is that the additional taxes
275	282		are due, the assessor for each taxing unit shall prepare and deliver
276	283		a bill for the additional taxes [and interest] as soon as
277	284		practicable after the change of use occurs. The taxes [and
278	285		interest] are due and become delinquent and incur penalties and
279	286		interest as provided by law for ad valorem taxes imposed by the
280	287		taxing unit if not paid before the next February 1 that is at least
281	288		20 days after the date the bill is delivered to the owner of the
282	289		land.
283	290		SECTION 8. The change in law made by Section 23.215, Tax
284	291		Code, as amended by this Act, applies only to an ad valorem tax year
285	292		that begins on or after January 1, 2022.
286	293		SECTION 9. Section 23.55, Tax Code, as amended by this Act,
287	294		applies only to a change of use of land appraised under Subchapter
288	295		D, Chapter 23, Tax Code, that occurs on or after the effective date
289	296		of this Act.
290	297		SECTION 10. Section 23.58, Tax Code, as amended by this Act,
291	298		applies only to a loan secured by a lien on open-space land that is
292	299		contracted for on or after the effective date of this Act.
293	300		SECTION 11. Section 23.76, Tax Code, as amended by this Act,
294	301		applies only to a change of use of land appraised under Subchapter
295	302		E, Chapter 23, Tax Code, that occurs on or after the effective date
296	303		of this Act.
297	304		SECTION 12. Section 23.86, Tax Code, as amended by this Act,
298	305		applies only to a change of use of land appraised under Subchapter
299	306		F, Chapter 23, Tax Code, that occurs on or after the effective date
300	307		of this Act.
301	308		SECTION 13. Section 23.96, Tax Code, as amended by this Act,
302	309		applies only to a change of use of land appraised under Subchapter
303	310		G, Chapter 23, Tax Code, that occurs on or after the effective date
304	311		of this Act.
305	312		SECTION 14. Section 23.9807, Tax Code, as amended by this
306	313		Act, applies only to a change of use of land appraised under
307	314		Subchapter H, Chapter 23, Tax Code, that occurs on or after the
308	315		effective date of this Act.
309	316		SECTION 15. This Act takes effect immediately if it
310	317		receives a vote of two-thirds of all the members elected to each
311	318		house, as provided by Section 39, Article III, Texas Constitution.
312	319		If this Act does not receive the vote necessary for immediate
313	320		effect, this Act takes effect September 1, 2021.
314		-	______________________________ ______________________________
315		-	President of the Senate Speaker of the House
316		-	I certify that H.B. No. 3833 was passed by the House on May 8,
317		-	2021, by the following vote: Yeas 136, Nays 2, 1 present, not
318		-	voting.
319		-	______________________________
320		-	Chief Clerk of the House
321		-	I certify that H.B. No. 3833 was passed by the Senate on May
322		-	27, 2021, by the following vote: Yeas 31, Nays 0.
323		-	______________________________
324		-	Secretary of the Senate
325		-	APPROVED: _____________________
326		-	Date
327		-	_____________________
328		-	Governor
	321	+	* * * * *