HBA-NLM H.B. 555 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 555
By: Hunter
Ways & Means
3/17/1999
Introduced



BACKGROUND AND PURPOSE 

Section 23.55 (Change of Use of Land), Tax Code, imposes a rollback tax on
agricultural land appraised on its productivity value when the owner of the
land changes the use of the land.  The rollback tax equals the difference
between the taxes the owner actually paid and the taxes the owner would
have paid on the property's market value for the previous five years, plus
interest. 

A report by the Interim Committee on Veterans Affairs to the 74th
Legislature determined that the constitutional requirement of a five-year
rollback has inhibited the ability of disabled veterans attempting to sell
farm land when the opportunity arises.  Currently, disabled veterans are
entitled to certain tax exemptions, under Section 11.22 (Disabled
Veterans), Tax Code, for a portion of the assessed value of property the
veterans own.  The purpose of this bill is to provide an exemption to the
additional rollback tax on certain land owned by a disabled veteran or
unmarried surviving spouse when a change of land use occurs or the land is
sold. 

H.B. 555 exempts a veteran or the veteran's unmarried surviving spouse from
the sanctions imposed under Section 23.55, Tax Code,  regarding a change of
use of land owned or purchased, if the change occurs while the land is
owned exclusively by the purchaser.  

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 Subchapter D, Chapter 23, Tax Code, by adding Section
23.551, as follows: 

Sec. 23.551.  VETERANS LAND EXEMPTED FROM SANCTIONS.  Defines "veteran."
Provides that the sanctions found in Section 23.55(a) do not apply to a
change of use of land that is owned by a veteran or a veteran's surviving
spouse, or that is purchased from a veteran or a veteran's surviving
spouse, if the change of use occurs while the land is owned exclusively by
the purchaser. Section 23.55(a) imposes an additional tax on the land if
the use of land that has been appraised changes under the provisions of
this subchapter.    

SECTION 2.  Emergency clause.
  Effective date: upon passage.