HBA-RBT H.B. 1449 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1449
By: Uher
Ways & Means
3/19/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, a tax penalty is imposed on the change of use of land from
timberland or agricultural purposes to other purposes that do not qualify
for the tax exemptions provided for agricultural land and timberland.  The
penalty imposed is equal to the difference between the tax levied for the
agricultural or timberland use in each of the previous five years and the
tax that would have been levied at market value in each of the previous
five years, plus interest at an annual rate of seven percent calculated
from the dates on which the differences would have become due. This penalty
may deter the commercial development of land, as the "market value" of the
land is much greater than its value as agricultural land or timberland. 

H.B. 1449 reduces the tax penalty on the change of use of agricultural land
or timberland by imposing a penalty equal to the difference between the tax
imposed on the land for the most recent year preceding the year in which
the change occurs in which the land was appraised for agricultural or
timberland use and the tax that would have been imposed had the land been
taxed on the basis of market value in that year. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 23.55(a), Tax Code, to provide that if the use
of land that has been appraised as agricultural land changes, an additional
tax is imposed based on the difference in value of the land as agricultural
land versus the fair market value of the land for the most recent year,
rather than each of the five years, preceding the year in which the change
of use occurs.  Makes conforming and nonsubstantive changes. 

SECTION 2.  Amends Section 23.76(a), Tax Code, to provide that if the use
of land that has been appraised as timberland changes, an additional tax is
imposed based on the difference in value of the land as timberland versus
the fair market value of the land for the most recent year, rather than
each of the five years, preceding the year in which the change of use
occurs.  Makes conforming and nonsubstantive changes. 

SECTION 3.  Effective date: September 1, 1999.
            Makes application of this Act prospective.

SECTION 4.  Emergency clause.