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.