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.