Bill Text: TX HB3833 | 2021-2022 | 87th Legislature | Enrolled


Bill Title: Relating to the appraisal of certain real property for ad valorem tax purposes.

Spectrum: Moderate Partisan Bill (Republican 45-5)

Status: (Enrolled) 2021-05-31 - Sent to the Governor [HB3833 Detail]

Download: Texas-2021-HB3833-Enrolled.html
 
 
  H.B. No. 3833
 
 
 
 
AN ACT
  relating to the appraisal of certain real property for ad valorem
  tax purposes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 23.215, Tax Code, is amended to read as
  follows:
         Sec. 23.215.  APPRAISAL OF CERTAIN NONEXEMPT PROPERTY USED
  FOR LOW-INCOME OR MODERATE-INCOME HOUSING. (a) This section
  applies only to real property owned by an organization:
               (1)  for the purpose of renting the property [that on
  the effective date of this section was rented] to a low-income or
  moderate-income individual or family satisfying the organization's
  income eligibility requirements [and that continues to be used for
  that purpose];
               (2)  that is or will be [was] financed under the low
  income housing tax credit program under Subchapter DD, Chapter
  2306, Government Code, and subject to a land use restriction
  agreement under that subchapter;
               (3)  that does not receive an exemption under Section
  11.182 or 11.1825; and
               (4)  the owner of which has not entered into an
  agreement with any taxing unit to make payments to the taxing unit
  instead of taxes on the property.
         (b)  In appraising property that is under construction or
  that has not reached stabilized occupancy on January 1 of the tax
  year in which the property is appraised, the [The] chief appraiser
  shall determine the value of [appraise] the property in the manner
  provided by Section 11.1825(q) using the property's projected
  income and expenses for the first full year of operation as
  established and utilized in the underwriting report pertaining to
  the property prepared by the Texas Department of Housing and
  Community Affairs under Subchapter DD, Chapter 2306, Government
  Code, and adjust that value as provided by this subsection to
  determine the appraised value of the property. For a property under
  construction on January 1, the chief appraiser shall adjust the
  value to reflect the percentage of the construction that is
  complete on January 1. For a property on which construction is
  complete but that has not reached stabilized occupancy on January
  1, the chief appraiser shall adjust the value to reflect the actual
  occupancy of the property on January 1. For purposes of this
  subsection, a property is not considered to be under construction
  if the purpose of the work being performed on the property is the
  maintenance or rehabilitation of the property.
         (c)  In appraising property for the first tax year following
  the year in which construction on the property is complete and
  occupancy of the property has stabilized and any tax year
  subsequent to that year, the chief appraiser shall determine the
  appraised value of the property in the manner provided by Section
  11.1825(q).
         SECTION 2.  Sections 23.55(a), (b), (e), (f), (m), and (n),
  Tax Code, are amended to read as follows:
         (a)  If the use of land that has been appraised as provided by
  this subchapter changes, an additional tax is imposed on the land
  equal to the difference between the taxes imposed on the land for
  each of the three years preceding the year in which the change of
  use occurs that the land was appraised as provided by this
  subchapter and the tax that would have been imposed had the land
  been taxed on the basis of market value in each of those years[,
  plus interest at an annual rate of five percent calculated from the
  dates on which the differences would have become due]. For purposes
  of this subsection, the chief appraiser may not consider any period
  during which land is owned by the state in determining whether a
  change in the use of the land has occurred.
         (b)  A tax lien attaches to the land on the date the change of
  use occurs to secure payment of the additional tax [and interest]
  imposed by this section and any penalties and interest incurred if
  the tax becomes delinquent. The lien exists in favor of all taxing
  units for which the additional tax is imposed.
         (e)  Subject to Section 23.551, a determination that a change
  in use of the land has occurred is made by the chief appraiser.  The
  chief appraiser shall deliver a notice of the determination to the
  owner of the land as soon as possible after making the determination
  and shall include in the notice an explanation of the owner's right
  to protest the determination.  If the owner does not file a timely
  protest or if the final determination of the protest is that the
  additional taxes are due, the assessor for each taxing unit shall
  prepare and deliver a bill for the additional taxes [plus interest]
  as soon as practicable.  The taxes [and interest] are due and
  become delinquent and incur penalties and interest as provided by
  law for ad valorem taxes imposed by the taxing unit if not paid
  before the next February 1 that is at least 20 days after the date
  the bill is delivered to the owner of the land.
         (f)  The sanctions provided by Subsection (a) [of this
  section] do not apply if the change of use occurs as a result of:
               (1)  a sale for right-of-way;
               (2)  a condemnation;
               (3)  a transfer of the property to the state or a
  political subdivision of the state to be used for a public purpose;
  or
               (4)  a transfer of the property from the state, a
  political subdivision of the state, or a nonprofit corporation
  created by a municipality with a population of more than one million
  under the Development Corporation Act (Subtitle C1, Title 12, Local
  Government Code) to an individual or a business entity for purposes
  of economic development if the comptroller determines that the
  economic development is likely to generate for deposit in the
  general revenue fund during the next two fiscal bienniums an amount
  of taxes and other revenues that equals or exceeds 20 times the
  amount of additional taxes [and interest] that would have been
  imposed under Subsection (a) had the sanctions provided by that
  subsection applied to the transfer.
         (m)  For purposes of determining whether a transfer of land
  qualifies for the exemption from additional taxes provided by
  Subsection (f)(4), on an application of the entity transferring or
  proposing to transfer the land or of the individual or entity to
  which the land is transferred or proposed to be transferred, the
  comptroller shall determine the amount of taxes and other revenues
  likely to be generated as a result of the economic development for
  deposit in the general revenue fund during the next two fiscal
  bienniums. If the comptroller determines that the amount of those
  revenues is likely to equal or exceed 20 times the amount of
  additional taxes [and interest] that would be imposed under
  Subsection (a) if the sanctions provided by that subsection applied
  to the transfer, the comptroller shall issue a letter to the
  applicant stating the comptroller's determination and shall send a
  copy of the letter by regular mail to the chief appraiser.
         (n)  Within one year of the conclusion of the two fiscal
  bienniums for which the comptroller issued a letter as provided
  under Subsection (m), the board of directors of the appraisal
  district, by official board action, may direct the chief appraiser
  to request the comptroller to determine if the amount of revenues
  was equal to or exceeded 20 times the amount of taxes [and interest]
  that would have been imposed under Subsection (a). The comptroller
  shall issue a finding as to whether the amount of revenue met the
  projected increases. The chief appraiser shall review the results
  of the comptroller's finding and shall make a determination as to
  whether sanctions under Subsection (a) should be imposed. If the
  chief appraiser determines that the sanctions provided by
  Subsection (a) shall be imposed, the sanctions shall be based on the
  date of the transfer of the property under Subsection (f)(4).
         SECTION 3.  Sections 23.58(c) and (d), Tax Code, are amended
  to read as follows:
         (c)  A provision in an instrument pertaining to a loan
  secured by a lien in favor of the lender on land appraised according
  to this subchapter that requires the borrower to make a payment to
  protect the lender from loss because of the imposition of
  additional taxes [and interest] under Section 23.55 is void unless
  the provision:
               (1)  requires the borrower to pay into an escrow
  account established by the lender an amount equal to the additional
  taxes [and interest] that would be due under Section 23.55 if a
  change of use occurred on January 1 of the year in which the loan is
  granted or amended;
               (2)  requires the escrow account to bear interest to be
  credited to the account monthly;
               (3)  permits the lender to apply money in the escrow
  account to the payment of a bill for additional taxes [and interest]
  under Section 23.55 before the loan is paid and requires the lender
  to refund the balance remaining in the escrow account after the bill
  is paid to the borrower; and
               (4)  requires the lender to refund the money in the
  escrow account to the borrower on the payment of the loan.
         (d)  On the request of the borrower or the borrower's
  representative, the assessor for each taxing unit shall compute the
  additional taxes [and interest] that would be due that taxing unit
  under Section 23.55 if a change of use occurred on January 1 of the
  year in which the loan is granted or amended. The assessor may
  charge a reasonable fee not to exceed the actual cost of making the
  computation.
         SECTION 4.  Sections 23.76(a), (b), and (e), Tax Code, are
  amended to read as follows:
         (a)  If the use of land that has been appraised as provided by
  this subchapter changes, an additional tax is imposed on the land
  equal to the difference between the taxes imposed on the land for
  each of the three years preceding the year in which the change of
  use occurs that the land was appraised as provided by this
  subchapter and the tax that would have been imposed had the land
  been taxed on the basis of market value in each of those years[,
  plus interest at an annual rate of five percent calculated from the
  dates on which the differences would have become due].
         (b)  A tax lien attaches to the land on the date the change of
  use occurs to secure payment of the additional tax [and interest]
  imposed by this section and any penalties and interest incurred if
  the tax becomes delinquent. The lien exists in favor of all taxing
  units for which the additional tax is imposed.
         (e)  A determination that a change in use of the land has
  occurred is made by the chief appraiser. The chief appraiser shall
  deliver a notice of the determination to the owner of the land as
  soon as possible after making the determination and shall include
  in the notice an explanation of the owner's right to protest the
  determination. If the owner does not file a timely protest or if
  the final determination of the protest is that the additional taxes
  are due, the assessor for each taxing unit shall prepare and deliver
  a bill for the additional taxes [and interest] as soon as
  practicable after the change of use occurs. The taxes [and
  interest] are due and become delinquent and incur penalties and
  interest as provided by law for ad valorem taxes imposed by the
  taxing unit if not paid before the next February 1 that is at least
  20 days after the date the bill is delivered to the owner of the
  land.
         SECTION 5.  Sections 23.86(a) and (b), Tax Code, are amended
  to read as follows:
         (a)  If land that has been appraised under this subchapter is
  no longer subject to a deed restriction or is diverted to a use
  other than recreational, park, or scenic uses, an additional tax is
  imposed on the land equal to the difference between the taxes
  imposed on the land for each of the three [five] years preceding the
  year in which the change of use occurs or the deed restriction
  expires that the land was appraised as provided by this subchapter
  and the tax that would have been imposed had the land not been
  restricted to recreational, park, or scenic uses in each of those
  years[, plus interest at an annual rate of seven percent calculated
  from the dates on which the differences would have become due].
         (b)  A tax lien attaches to the land on the date the change of
  use occurs or the deed restriction expires to secure payment of the
  additional tax [and interest] imposed by this section and any
  penalties and interest incurred if the tax becomes delinquent.  The
  lien exists in favor of all taxing units for which the additional
  tax is imposed.
         SECTION 6.  Sections 23.96(a) and (b), Tax Code, are amended
  to read as follows:
         (a)  If airport property that has been appraised under this
  subchapter is no longer subject to a deed restriction, an
  additional tax is imposed on the property equal to the difference
  between the taxes imposed on the property for each of the three
  [five] years preceding the year in which the deed restriction
  expires that the property was appraised as provided by this
  subchapter and the tax that would have been imposed had the property
  not been restricted to use as public access airport property in each
  of those years[, plus interest at an annual rate of seven percent
  calculated from the dates on which the differences would have
  become due].
         (b)  A tax lien attaches to the property on the date the deed
  restriction expires to secure payment of the additional tax [and
  interest] imposed by this section and any penalties and interest
  incurred if the tax becomes delinquent. The lien exists in favor of
  all taxing units for which the additional tax is imposed.
         SECTION 7.  Sections 23.9807(a), (b), (c), and (f), Tax
  Code, are amended to read as follows:
         (a)  If the use of land that has been appraised as provided by
  this subchapter changes to a use that qualifies the land for
  appraisal under Subchapter E, an additional tax is imposed on the
  land equal to [the sum of:
               [(1)]  the difference between:
               (1) [(A)]  the taxes imposed on the land for each of the
  three [five] years preceding the year in which the change of use
  occurs that the land was appraised as provided by this subchapter;
  and
               (2) [(B)]  the taxes that would have been imposed had
  the land been appraised under Subchapter E in each of those years[;
  and
               [(2)  interest at an annual rate of seven percent
  calculated from the dates on which the differences would have
  become due].
         (b)  If the use of land that has been appraised as provided by
  this subchapter changes to a use that does not qualify the land for
  appraisal under Subchapter E or under this subchapter, an
  additional tax is imposed on the land equal to [the sum of:
               [(1)]  the difference between:
               (1) [(A)]  the taxes imposed on the land for each of the
  three [five] years preceding the year in which the change of use
  occurs that the land was appraised as provided by this subchapter;
  and
               (2) [(B)]  the taxes that would have been imposed had
  the land been taxed on the basis of market value in each of those
  years[; and
               [(2)  interest at an annual rate of seven percent
  calculated from the dates on which the differences would have
  become due].
         (c)  A tax lien attaches to the land on the date the change of
  use occurs to secure payment of the additional tax [and interest]
  imposed by this section and any penalties and interest incurred if
  the tax becomes delinquent. The lien exists in favor of all taxing
  units for which the additional tax is imposed.
         (f)  A determination that a change in use of the land has
  occurred is made by the chief appraiser. The chief appraiser shall
  deliver a notice of the determination to the owner of the land as
  soon as possible after making the determination and shall include
  in the notice an explanation of the owner's right to protest the
  determination. If the owner does not file a timely protest or if
  the final determination of the protest is that the additional taxes
  are due, the assessor for each taxing unit shall prepare and deliver
  a bill for the additional taxes [and interest] as soon as
  practicable after the change of use occurs. The taxes [and
  interest] are due and become delinquent and incur penalties and
  interest as provided by law for ad valorem taxes imposed by the
  taxing unit if not paid before the next February 1 that is at least
  20 days after the date the bill is delivered to the owner of the
  land.
         SECTION 8.  The change in law made by Section 23.215, Tax
  Code, as amended by this Act, applies only to an ad valorem tax year
  that begins on or after January 1, 2022.
         SECTION 9.  Section 23.55, Tax Code, as amended by this Act,
  applies only to a change of use of land appraised under Subchapter
  D, Chapter 23, Tax Code, that occurs on or after the effective date
  of this Act.
         SECTION 10.  Section 23.58, Tax Code, as amended by this Act,
  applies only to a loan secured by a lien on open-space land that is
  contracted for on or after the effective date of this Act.
         SECTION 11.  Section 23.76, Tax Code, as amended by this Act,
  applies only to a change of use of land appraised under Subchapter
  E, Chapter 23, Tax Code, that occurs on or after the effective date
  of this Act.
         SECTION 12.  Section 23.86, Tax Code, as amended by this Act,
  applies only to a change of use of land appraised under Subchapter
  F, Chapter 23, Tax Code, that occurs on or after the effective date
  of this Act.
         SECTION 13.  Section 23.96, Tax Code, as amended by this Act,
  applies only to a change of use of land appraised under Subchapter
  G, Chapter 23, Tax Code, that occurs on or after the effective date
  of this Act.
         SECTION 14.  Section 23.9807, Tax Code, as amended by this
  Act, applies only to a change of use of land appraised under
  Subchapter H, Chapter 23, Tax Code, that occurs on or after the
  effective date of this Act.
         SECTION 15.  This Act takes effect immediately if it
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.  
  If this Act does not receive the vote necessary for immediate
  effect, this Act takes effect September 1, 2021.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 3833 was passed by the House on May 8,
  2021, by the following vote:  Yeas 136, Nays 2, 1 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 3833 was passed by the Senate on May
  27, 2021, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor       
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