In normal real estate transactions it is customary for current taxes to be prorated between the buyer and seller, but a different situation occurs in a sale to TxDOT because TxDOT is not obliged to pay state or local tax.

, provides for complete tax proration by all taxing agencies on all acquisitions by governmental agencies or any other body politic having the power of ED. Whenever TxDOT or an LPA purchases or condemns land for right of way, current taxes owed by the landowner are to be prorated by the taxing authority or agency involved on the basis of the months the land remained in private ownership or control, until the date of conveyance to TxDOT or date of possession.

Date of possession on condemned parcels is the date the warrant in the amount of the award is deposited in the registry of the court. If no deposit is made before the date the judgment is rendered, the date of the judgment will constitute the date of taking.

In acquiring right of way by negotiation, TxDOT must cooperate with all taxing agencies for payment of current taxes on whole takings on a prorated basis. Prorated taxes will be determined by the taxing agencies. Prorated taxes may be disbursed from the proceeds due the property owner or may be paid prior to closing by the property owner. In partial takings when payment of current taxes is not handled during the closing of the transaction, future settlement of tax liability will be a matter between the taxing agency and the property owner involved. However, if the taxing agency and property owner cannot agree on a method for tax payment, TxDOT has no option other than to make payment to the property owner without regard to current taxes.

When whole takings are condemned, the taxing agencies will be joined, and they will be notified of the proceedings.