(a) Land designated for agricultural use is appraised at its value based on the
land's capacity to produce agricultural products. The value of land based on
its capacity to produce agricultural products is determined by capitalizing the
average net income the land would have yielded under prudent management from
production of agricultural products during the five years preceding the current
year. However, if the value of land as determined by capitalization of average
net income exceeds the market value of the land as determined by other
generally accepted appraisal methods, the land shall be appraised by
application of the other appraisal methods.
(b) The comptroller shall
promulgate rules specifying the methods to apply and the procedures to use in
appraising land designated for agricultural use.
(c), (d) Repealed by Acts 1999,
76th Leg., ch. 574, Sec. 2(2), eff. June 18, 1999.
(e) Improvements other than
appurtenances to the land, the mineral estate, and all land used for
residential purposes and for processing harvested agricultural products are
appraised separately at market value. Riparian water rights, private roads,
dams, reservoirs, water wells, and canals, ditches, terraces, and similar
reshapings of or additions to the soil for agricultural purposes are
appurtenances to the land, and the effect of each on the value of the land for
agricultural use shall be considered in appraising the land. However, the
comptroller shall provide that in calculating average net income from land a
deduction from income be allowed for an appurtenance subject to depreciation or
depletion.
Acts 1979, 66th Leg., p. 2254,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S.,
p. 139, ch. 13, Sec. 60, eff. Jan. 1, 1982; Acts 1991, 72nd Leg., 2nd C.S., ch.
6, Sec. 21, eff. Sept. 1, 1991; Acts 1999, 76th Leg., ch. 574, Sec. 2(2), eff.
June 18, 1999.
(a) Except as provided by Subsection (a-1), an individual is entitled to have
land he owns designated for agricultural use if, on January 1:
(1) the land has been devoted
exclusively to or developed continuously for agriculture for the three years
preceding the current year;
(2) the individual is using and
intends to use the land for agriculture as an occupation or a business venture
for profit during the current year; and
(3) agriculture is the
individual's primary occupation and primary source of income.
(a-1) On or after January 1,
2008, an individual is not entitled to have land designated for agricultural
use if the land secures a home equity loan described by Section 50(a)(6),
Article XVI, Texas Constitution.
(b) Use of land for
nonagricultural purposes does not deprive an owner of his right to an
agricultural designation if the nonagricultural use is secondary to and
compatible with the agricultural use of the land.
(c) Agriculture is an
individual's primary occupation and primary source of income if as of January 1
he devotes a greater portion of his time to and derives a greater portion of
his gross income from agriculture than any other occupation. The time an
individual devotes to each occupation and the gross income he derives from each
is determined by averaging the time he devoted to each and the gross income he
derived from each for any number of consecutive years not exceeding five years
immediately preceding January 1 of the current year, that he has engaged in
agriculture as an occupation. However, if he has not been engaged in
agriculture as an occupation for the entire year preceding January 1, the time
he has devoted to and the income he has derived from each occupation since the
date he began engaging in agriculture as an occupation determine whether
agriculture is his primary occupation and primary source of income.
(d) For purposes of this
section:
(1) "Agriculture"
means the use of land to produce plant or animal products, including fish or
poultry products, under natural conditions but does not include the processing
of plant or animal products after harvesting or the production of timber or
forest products.
(2) "Occupation"
includes employment and a business venture that requires continual supervision
or management.
Acts 1979, 66th Leg., p. 2254,
ch. 841, Sec. 1, eff. Jan. 1, 1982.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
<a target="new"
href="http://www.legis.state.tx.us/tlodocs/80R/billtext/html/HB03630F.HTM">1112</a>,
Sec. 2, eff. January 1, 2008.
(a) This section applies only to land:
(1) that is located in a county
with a population of 35,000 or less; and
(2) on which a greenhouse for
growing florist items solely for wholesale purposes is located.
(b) A person who owns land
described by Subsection (a) is entitled to have the land designated for
agricultural use under this subchapter if the land otherwise qualifies for the
designation under Section 23.42 and the person who owns the land is not using
it in conjunction with or contiguous to land being used to conduct retail sales
of florist items. For purposes of Section 23.41, a greenhouse described by
Subsection (a)(2) is an appurtenance to the land.
(c) In this section:
(1) "Florist item" has
the meaning assigned by Section 71.041, Agriculture Code.
(2) "Greenhouse" means
a building or permanent structure that is enclosed with a nonporous covering
and is designed or constructed for growing plants in a protected or
climate-controlled environment.
Added by Acts 2001, 77th Leg.,
ch. 365, Sec. 1, eff. Jan. 1, 2002.
(a) An individual claiming the right to have his land designated for
agricultural use must apply for the designation each year he claims it.
Application for the designation is made by filing a sworn application form with
the chief appraiser for the appraisal district in which the land is located.
(b) A claimant must deliver a
completed application form to the chief appraiser before May 1 and must furnish
the information required by the form. For good cause shown the chief appraiser
may extend the deadline for filing the application by written order for a
single period not to exceed 60 days.
(c) If a claimant fails to
timely file a completed application form in a given year, he may not receive
the agricultural designation for that year.
(d) The comptroller in
prescribing the contents of the application forms shall ensure that each form
requires a claimant to furnish the information necessary to determine the
validity of the claim. The comptroller shall require that the form permit a
claimant who has previously been allowed an agricultural designation to
indicate that previously reported information has not changed and to supply
only the eligibility information not previously reported.
(e) Before February 1 the chief
appraiser shall deliver an application form to each individual whose land was
designated for agricultural use during the preceding year. He shall include
with the application a brief explanation of the requirements for obtaining agricultural
designation.
(f) Each year the chief
appraiser for each appraisal district shall publicize, in a manner reasonably
designed to notify all residents of the district, the requirements of this
section and the availability of application forms.
Acts 1979, 66th Leg., p. 2255,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S.,
p. 139, ch. 13, Sec. 61, 62, eff. Jan. 1, 1982; Acts 1991, 72nd Leg., 2nd C.S.,
ch. 6, Sec. 22, eff. Sept. 1, 1991.
§ 23.431 : Texas Statutes - Section 23.431: LATE APPLICATION FOR AGRICULTURAL
DESIGNATION
(a) The chief appraiser shall
accept and approve or deny an application for an agricultural designation after
the deadline for filing it has passed if it is filed before approval of the
appraisal records by the appraisal review board.
(b) If an application for
agricultural designation is approved when the application is filed late, the
owner is liable for a penalty of 10 percent of the difference between the
amount of tax imposed on the property and the amount that would be imposed
without the agricultural designation.
(c) The chief appraiser shall
make an entry on the appraisal records indicating the person's liability for
the penalty and shall deliver written notice of imposition of the penalty,
explaining the reason for its imposition, to the person.
(d) The tax assessor for a
taxing unit to which an agricultural designation allowed after a late
application applies shall add the amount of the penalty to the owner's tax
bill, and the tax collector for the unit shall collect the penalty at the time
and in the manner he collects the tax. The amount of the penalty constitutes a
lien against the property against which the penalty is imposed, as if it were a
tax, and accrues penalty and interest in the same manner as a delinquent tax.
Added by Acts 1981, 67th Leg.,
1st C.S., p. 140, ch. 13, Sec. 63, eff. Jan. 1, 1982.
(a) The chief appraiser shall determine individually each claimant's right to
the agricultural designation. After considering the application and all
relevant information, the chief appraiser shall, as the law and facts warrant:
(1) approve the application and
designate the land for agricultural use;
(2) disapprove the application
and request additional information from the claimant in support of the claim;
or
(3) deny the application.
(b) If the chief appraiser
requests additional information from a claimant, the claimant must furnish the
information within 30 days after the date of the request or the application is
denied. However, for good cause shown the chief appraiser may extend the
deadline for furnishing additional information by written order for a single
period not to exceed 15 days.
(c) The chief appraiser shall
determine the validity of each application for agricultural designation filed
with him before he submits the appraisal records for review and determination
of protests as provided by Chapter 41 of this code.
(d) If the chief appraiser
denies an application, he shall deliver a written notice of the denial to the
claimant within five days after the date of denial. The notice must include a
brief explanation of the procedures for protesting the denial.
Acts 1979, 66th Leg., p. 2255,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S.,
p. 140, ch. 13, Sec. 64, eff. Jan. 1, 1982.
(a) An application for agricultural designation filed with a chief appraiser is
confidential and not open to public inspection. The application and the
information it contains about specific property or a specific owner may not be
disclosed to anyone other than an employee of the appraisal office who
appraises property except as authorized by Subsection (b) of this section.
(b) Information made
confidential by this section may be disclosed:
(1) in a judicial or
administrative proceeding pursuant to a lawful subpoena;
(2) to the person who filed the
application or to his representative authorized in writing to receive the
information;
(3) to the comptroller and his
employees authorized by him in writing to receive the information or to an
assessor or a chief appraiser if requested in writing;
(4) in a judicial or
administrative proceeding relating to property taxation to which the person who
filed the application is a party;
(5) for statistical purposes if
in a form that does not identify specific property or a specific property
owner; or
(6) if and to the extent the
information is required to be included in a public document or record that the
appraisal office is required to prepare or maintain.
(c) A person who legally has
access to an application for agricultural designation or who legally obtains
the confidential information the application contains commits a Class B
misdemeanor if he knowingly:
(1) permits inspection of the
application by a person not authorized to inspect it by Subsection (b) of this
section; or
(2) discloses confidential
information contained in the report to a person not authorized to receive the
information by Subsection (b) of this section.
Acts 1979, 66th Leg., p. 2256,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S.,
p. 141, ch. 13, Sec. 65, eff. Jan. 1, 1982; Acts 1991, 72nd Leg., 2nd C.S., ch.
6, Sec. 23, eff. Sept. 1, 1991.
(a) When appraising land designated for agricultural use, the chief appraiser
also shall appraise the land at its market value and shall record both the
market value and the value based on its capacity to produce agricultural
products in the appraisal records.
(b) Property taxes imposed on
land designated for agricultural use are based on the land's agricultural use
value determined as provided by Section 23.41 of this code after the
appropriate assessment ratio has been applied to that value. When an assessor
calculates the amount of tax due on the land, however, he shall also calculate
the amount of tax that would have been imposed had the land not been designated
for agricultural use. The difference in the amount of tax imposed and the
amount that would have been imposed is the amount of additional tax for that
year, and the assessor shall enter that amount in his tax records relating to
the property.
(c) If land that has been
designated for agricultural use in any year is sold or diverted to a
nonagricultural use, the total amount of additional taxes for the three years preceding
the year in which the land is sold or diverted plus interest at the rate
provided for delinquent taxes becomes due. A determination that the land has
been diverted to a nonagricultural use is made by the chief appraiser. For
purposes of this subsection, the chief appraiser may not consider any period
during which land is owned by the state in determining whether the land has
been diverted to a nonagricultural use. The chief appraiser shall deliver a
notice of the determination to the owner of the land as soon as possible after
making the determination and shall include in the notice an explanation of the
owner's right to protest the determination. If the owner does not file a timely
protest or if the final determination of the protest is that the additional
taxes are due, the assessor for each taxing unit shall prepare and deliver a
bill for the additional taxes plus interest as soon as practicable after the
change of use occurs. If the additional taxes are due because of a sale of the
land, the assessor for each taxing unit shall prepare and deliver the bill as
soon as practicable after the sale occurs. The taxes and interest are due and
become delinquent and incur penalties and interest as provided by law for ad
valorem taxes imposed by the taxing unit if not paid before the next February 1
that is at least 20 days after the date the bill is delivered to the owner of
the land.
(d) A tax lien attaches to the
land on the date the sale or change of use occurs to secure payment of the
additional tax and interest imposed by Subsection (c) of this section and any
penalties incurred. The lien exists in favor of all taxing units for which the
additional tax is imposed.
(e) Land is not diverted to
nonagricultural use for purposes of Subsection (c) of this section solely
because the owner of the land claims it as part of his residence homestead for
purposes of Section 11.13 of this code.
Acts 1979, 66th Leg., p. 2256,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S.,
p. 141, ch. 13, Sec. 66, eff. Jan. 1, 1982; Acts 1983, 68th Leg., p. 4147, ch.
652, Sec. 1, eff. June 19, 1983; Acts 1983, 68th Leg., p. 4824, ch. 851, Sec.
11, eff. Aug. 29, 1983; Acts 1989, 71st Leg., ch. 796, Sec. 18, eff. Sept. 1,
1989; Acts 1997, 75th Leg., ch. 345, Sec. 4, eff. Sept. 1, 1997.
(a) A lender may not require as a condition to granting or amending the terms of
a loan secured by a lien in favor of the lender on land appraised according to
this subchapter that the borrower waive the right to the appraisal or agree not
to apply for or receive the appraisal.
(b) A provision in an instrument
pertaining to a loan secured by a lien in favor of the lender on land appraised
according to this subchapter is void to the extent that the provision attempts
to require the borrower to waive the right to the appraisal or to prohibit the
borrower from applying for or receiving the appraisal.
(c) A provision in an instrument
pertaining to a loan secured by a lien in favor of the lender on land appraised
according to this subchapter that requires the borrower to make a payment to
protect the lender from loss because of the imposition of additional taxes and
interest under Section 23.46 is void unless the provision:
(1) requires the borrower to pay
into an escrow account established by the lender an amount equal to the
additional taxes and interest that would be due under Section 23.46 if a sale
or change of use occurred on January 1 of the year in which the loan is granted
or amended;
(2) requires the escrow account
to bear interest to be credited to the account monthly;
(3) permits the lender to apply
money in the escrow account to the payment of a bill for additional taxes and
interest under Section 23.46 before the loan is paid and requires the lender to
refund the balance remaining in the escrow account after the bill is paid to
the borrower; and
(4) requires the lender to
refund the money in the escrow account to the borrower on the payment of the
loan.
(d) On the request of the
borrower or the borrower's representative, the assessor for each taxing unit
shall compute the additional taxes and interest that would be due that taxing
unit under Section 23.46 if a sale or change of use occurred on January 1 of
the year in which the loan is granted or amended. The assessor may charge a
reasonable fee not to exceed the actual cost of making the computation.
(e) In this section,
"lender" means a lending institution, including a bank, trust
company, banking association, savings and loan association, mortgage company,
investment bank, credit union, life insurance company, or governmental agency
that customarily provides financing or an affiliate of any of those entities.
The term does not include an agency of the United States.
Added by Acts 1995, 74th Leg.,
ch. 82, Sec. 1, eff. May 11, 1995.
(a) An owner of land designated for agricultural use on which the Texas Animal
Health Commission has established a temporary quarantine of at least 90 days in
length in the current tax year for the purpose of regulating the handling of
livestock and eradicating ticks or exposure to ticks at any time during a tax
year is entitled to a reappraisal of the owner's land for that year on written
request delivered to the chief appraiser.
(b) As soon as practicable after
receiving a request for reappraisal, the chief appraiser shall complete the
reappraisal. In determining the appraised value of the land under Section
23.41, the effect on the value of the land caused by the infestation of ticks
is an additional factor that must be taken into account. The appraised value of
land reappraised under this section may not exceed the lesser of:
(1) the market value of the land
as determined by other appraisal methods; or
(2) one-half of the original
appraised value of the land for the current tax year.
(c) A property owner may not be
required to pay the appraisal district for the costs of making the reappraisal.
Each taxing unit that participates in the appraisal district and imposes taxes
on the land shall share the costs of the reappraisal in the proportion the total
dollar amount of taxes imposed by that taxing unit on that land in the
preceding year bears to the total dollar amount of taxes all taxing units
participating in the appraisal district imposed on the land in the preceding
year.
(d) If land is reappraised as
provided by this section, the governing body of each taxing unit that
participates in the appraisal district and imposes taxes on the land shall
provide for prorating the taxes on the land for the tax year in which the
reappraisal is conducted. If the taxes are prorated, taxes due on the land are
determined as follows: the taxes on the land based on its value on January 1 of
that year are multiplied by a fraction, the denominator of which is 365 and the
numerator of which is the number of days in that year before the date the
reappraisal was conducted; the taxes on the land based on its reappraised value
are multiplied by a fraction, the denominator of which is 365 and the numerator
of which is the number of days, including the date the reappraisal was conducted,
remaining in the year; and the total of the two amounts is the amount of taxes
imposed on the land for that year. Notwithstanding Section 26.15, the assessor
for each applicable taxing unit shall enter the reappraised value on the
appropriate tax roll together with the original appraised value and the
calculation of the taxes imposed on the land under this section. If for any tax
year the reappraisal results in a decrease in the tax liability of the
landowner, the assessor for the taxing unit shall prepare and mail a new tax
bill in the manner provided by Chapter 31. If the owner has paid the tax, each
taxing unit that imposed taxes on the land in that year shall promptly refund
the difference between the tax paid and the tax due on the lower appraised
value.
(e) In appraising the land for
any subsequent tax year in which the Texas Animal Health Commission quarantine
remains in place, the chief appraiser shall continue to take into account the
effect on the value of the land caused by the infestation of ticks.
(f) If the owner of the land is
informed by the Texas Animal Health Commission that the quarantine is no longer
in place, not later than the 30th day after the date on which the owner
received that information the owner of the land shall so notify the chief
appraiser in writing. If the owner fails to notify the chief appraiser as
required by this subsection, a penalty is imposed on the property equal to 10
percent of the difference between the taxes imposed on the property in each
year it is erroneously allowed appraisal under this section and the taxes that
would otherwise have been imposed.
(g) The chief appraiser shall
make an entry in the appraisal records for the property against which the
penalty is imposed indicating liability for the penalty and shall deliver a
written notice of imposition of the penalty to the person who owns the
property. The notice shall include a brief explanation of the procedures for
protesting the imposition of the penalty. The assessor for each taxing unit
that imposed taxes on the property on the basis of appraisal under this section
shall add the amount of the penalty to the unit's tax bill for taxes on the
property against which the penalty is imposed. The penalty shall be collected
at the same time and in the same manner as the taxes on the property against
which the penalty is imposed. The amount of the penalty constitutes a lien on
the property against which the penalty is imposed and accrues penalty and
interest in the same manner as a delinquent tax.
Added by Acts 2007, 80th Leg.,
R.S., Ch. <a target="new"
href="http://www.legis.state.tx.us/tlodocs/80R/billtext/html/HB00967F.HTM">1011</a>,
Sec. 2, eff. June 15, 2007.
In this subchapter:
(1) "Qualified open-space
land" means land that is currently devoted principally to agricultural use
to the degree of intensity generally accepted in the area and that has been
devoted principally to agricultural use or to production of timber or forest
products for five of the preceding seven years or land that is used principally
as an ecological laboratory by a public or private college or university.
Qualified open-space land includes all appurtenances to the land. For the
purposes of this subdivision, appurtenances to the land means private roads,
dams, reservoirs, water wells, canals, ditches, terraces, and other reshapings
of the soil, fences, and riparian water rights. Notwithstanding the other
provisions of this subdivision, land that is currently devoted principally to
wildlife management as defined by Subdivision (7)(B) or (C) to the degree of
intensity generally accepted in the area qualifies for appraisal as qualified
open-space land under this subchapter regardless of the manner in which the
land was used in any preceding year.
(2) "Agricultural use"
includes but is not limited to the following activities: cultivating the soil,
producing crops for human food, animal feed, or planting seed or for the
production of fibers; floriculture, viticulture, and horticulture; raising or
keeping livestock; raising or keeping exotic animals for the production of
human food or of fiber, leather, pelts, or other tangible products having a
commercial value; planting cover crops or leaving land idle for the purpose of
participating in a governmental program, provided the land is not used for
residential purposes or a purpose inconsistent with agricultural use; and
planting cover crops or leaving land idle in conjunction with normal crop or
livestock rotation procedure. The term also includes the use of land to produce
or harvest logs and posts for the use in constructing or repairing fences,
pens, barns, or other agricultural improvements on adjacent qualified
open-space land having the same owner and devoted to a different agricultural
use. The term also includes the use of land for wildlife management.
(3) "Category" means
the value classification of land considering the agricultural use to which the
land is principally devoted. The chief appraiser shall determine the categories
into which land in the appraisal district is classified. In classifying land
according to categories, the chief appraiser shall distinguish between
irrigated cropland, dry cropland, improved pasture, native pasture, orchard,
and waste. The chief appraiser may establish additional categories. The chief
appraiser shall further divide each category according to soil type, soil
capability, irrigation, general topography, geographical factors, and other
factors that influence the productive capacity of the category. The chief
appraiser shall obtain information from the Texas Agricultural Extension
Service, the Natural Resources Conservation Service of the United States
Department of Agriculture, and other recognized agricultural sources for the
purposes of determining the categories of land existing in the appraisal
district.
(4) "Net to land"
means the average annual net income derived from the use of open-space land
that would have been earned from the land during the five-year period preceding
the year before the appraisal by an owner using ordinary prudence in the
management of the land and the farm crops or livestock produced or supported on
the land and, in addition, any income received from hunting or recreational
leases. The chief appraiser shall calculate net to land by considering the
income that would be due to the owner of the land under cash lease, share
lease, or whatever lease arrangement is typical in that area for that category
of land, and all expenses directly attributable to the agricultural use of the
land by the owner shall be subtracted from this owner income and the results
shall be used in income capitalization. In calculating net to land, a
reasonable deduction shall be made for any depletion that occurs of underground
water used in the agricultural operation. For land that qualifies under
Subdivision (7) for appraisal under this subchapter, the chief appraiser may
not consider in the calculation of net to land the income that would be due to
the owner under a hunting or recreational lease of the land.
(5) "Income
capitalization" means the process of dividing net to land by the
capitalization rate to determine the appraised value.
(6) "Exotic animal"
means a species of game not indigenous to this state, including axis deer,
nilga antelope, red sheep, other cloven-hoofed ruminant mammals, or exotic fowl
as defined by Section 142.001, Agriculture Code.
(7) "Wildlife
management" means:
(A) actively using land that at
the time the wildlife-management use began was appraised as qualified
open-space land under this subchapter in at least three of the following ways
to propagate a sustaining breeding, migrating, or wintering population of
indigenous wild animals for human use, including food, medicine, or recreation:
(i) habitat control;
(ii) erosion control;
(iii) predator control;
(iv) providing supplemental
supplies of water;
(v) providing supplemental
supplies of food;
(vi) providing shelters; and
(vii) making of census counts to
determine population;
(B) actively using land to
protect federally listed endangered species under a federal permit if the land
is:
(i) included in a habitat
preserve and is subject to a conservation easement created under Chapter 183,
Natural Resources Code; or
(ii) part of a conservation
development under a federally approved habitat conservation plan that restricts
the use of the land to protect federally listed endangered species; or
(C) actively using land for a
conservation or restoration project to provide compensation for natural
resource damages pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), the
Oil Pollution Act of 1990 (33 U.S.C. Section 2701 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. Section 1251 et seq.), or Chapter 40, Natural
Resources Code.
(8) "Endangered
species," "federal permit," and "habitat preserve"
have the meanings assigned by Section 83.011, Parks and Wildlife Code.
Acts 1979, 66th Leg., p. 2257,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S.,
p. 142, ch. 13, Sec. 67, eff. Jan. 1, 1982; Acts 1985, 69th Leg., ch. 207, Sec.
1, eff. Sept. 1, 1985; Acts 1987, 70th Leg., ch. 773, Sec. 1, eff. Jan. 1,
1988; Acts 1987, 70th Leg., ch. 780, Sec. 1, 2, eff. Jan. 1, 1988; Acts 1989,
71st Leg., ch. 796, Sec. 19, eff. Jan. 1, 1990; Acts 1991, 72nd Leg., ch. 560,
Sec. 1 to 3, eff. Jan. 1, 1992; Acts 1993, 73rd Leg., ch. 203, Sec. 6, eff.
Sept. 1, 1993; Acts 1995, 74th Leg., ch. 911, Sec. 1, eff. Jan. 1, 1996; Acts
2003, 78th Leg., ch. 775, Sec. 1, eff. Jan. 1, 2004.
Amended by:
Acts 2005, 79th Leg., Ch. <a
target="new" href="http://www.legis.state.tx.us/tlodocs/79R/billtext/html/SB00760F.HTM">817</a>,
Sec. 1, eff. January 1, 2006.
Acts 2005, 79th Leg., Ch. <a
target="new"
href="http://www.legis.state.tx.us/tlodocs/79R/billtext/html/HB02491F.HTM">1126</a>,
Sec. 6, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
<a target="new"
href="http://www.legis.state.tx.us/tlodocs/80R/billtext/html/HB00604F.HTM">454</a>,
Sec. 1, eff. January 1, 2008.
Acts 2007, 80th Leg., R.S., Ch.
<a target="new"
href="http://www.legis.state.tx.us/tlodocs/80R/billtext/html/HB03630F.HTM">1112</a>,
Sec. 3, eff. January 1, 2008.
(a) The appraised value of qualified open-space land is determined on the basis
of the category of the land, using accepted income capitalization methods
applied to average net to land. The appraised value so determined may not
exceed the market value as determined by other appraisal methods.
(b) The chief appraiser shall
determine the appraised value according to this subchapter and, when requested
by a landowner, the appraised value according to Subchapter C of this chapter
of each category of open-space land owned by that landowner and shall make each
value and the market value according to the preceding year's appraisal roll
available to a person seeking to apply for appraisal as provided by this
subchapter or as provided by Subchapter C of this chapter.
(c) The chief appraiser may not
change the appraised value of a parcel of open-space land unless the owner has
applied for and the land has qualified for appraisal as provided by this
subchapter or by Subchapter C of this chapter or unless the change is made as a
result of a reappraisal.
(d) The comptroller by rule
shall develop and distribute to each appraisal office appraisal manuals setting
forth this method of appraising qualified open-space land, and each appraisal
office shall use the appraisal manuals in appraising qualified open-space land.
The comptroller by rule shall develop and the appraisal office shall enforce
procedures to verify that land meets the conditions contained in Subdivision
(1) of Section 23.51 of this code. The rules, before taking effect, must be
approved by a majority vote of a committee comprised of the following officials
or their designees: the governor, the comptroller, the attorney general, the
agriculture commissioner, and the Commissioner of the General Land Office.
(e) For the purposes of Section
23.55 of this code, the chief appraiser also shall determine the market value
of qualified open-space land and shall record both the market value and the
appraised value in the appraisal records.
(f) The appraisal of minerals or
subsurface rights to minerals is not within the provisions of this subchapter.
(g) Repealed by Acts 2001, 77th
Leg., ch. 1172, Sec. 2, eff. Sept. 1, 2001.
Acts 1979, 66th Leg., p. 2258,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S.,
p. 143, ch. 13, Sec. 68, eff. Jan. 1, 1982; Acts 1991, 72nd Leg., 2nd C.S., ch.
6, Sec. 24, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 911, Sec. 2, eff.
Jan. 1, 1996; Acts 2001, 77th Leg., ch. 1172, Sec. 2, eff. Sept. 1, 2001.
(a) The Parks and Wildlife Department, with the assistance of the comptroller,
shall develop standards for determining whether land qualifies under Section
23.51(7) for appraisal under this subchapter. The comptroller by rule shall
adopt the standards developed by the Parks and Wildlife Department and
distribute those rules to each appraisal district. On request of the Parks and
Wildlife Department, the Texas Agricultural Extension Service shall assist the
department in developing the standards.
(b) The standards adopted under
Subsection (a) may require that a tract of land be a specified minimum size to
qualify under Section 23.51(7)(A) for appraisal under this subchapter, taking
into consideration one or more of the following factors:
(1) the activities listed in
Section 23.51(7)(A);
(2) the type of indigenous wild
animal population the land is being used to propagate;
(3) the region in this state in
which the land is located; and
(4) any other factor the Parks
and Wildlife Department determines is relevant.
(c) The standards adopted under
Subsection (a) may include specifications for a written management plan to be
developed by a landowner if the landowner receives a request for a written
management plan from a chief appraiser as part of a request for additional
information under Section 23.57.
(d) In determining whether land
qualifies under Section 23.51(7) for appraisal under this subchapter, the chief
appraiser and the appraisal review board shall apply the standards adopted
under Subsection (a) and, to the extent they do not conflict with those
standards, the appraisal manuals developed and distributed under Section
23.52(d).
Added by Acts 2001, 77th Leg.,
ch. 1172, Sec. 1, eff. Sept. 1, 2001.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
<a target="new"
href="http://www.legis.state.tx.us/tlodocs/80R/billtext/html/HB00604F.HTM">454</a>,
Sec. 2, eff. January 1, 2008.
The capitalization rate to be used in determining the appraised value of
qualified open-space land as provided by this subchapter is 10 percent or the
interest rate specified by the Farm Credit Bank of Texas or its successor on
December 31 of the preceding year plus 2-1/2 percentage points, whichever
percentage is greater.
Acts 1979, 66th Leg., p. 2259,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1995, 74th Leg., ch. 579,
Sec. 4, eff. Jan. 1, 1996.
(a) A person claiming that his land is eligible for appraisal under this
subchapter must file a valid application with the chief appraiser.
(b) To be valid, the application
must:
(1) be on a form provided by the
appraisal office and prescribed by the comptroller; and
(2) contain the information
necessary to determine the validity of the claim.
(c) The comptroller shall
include on the form a notice of the penalties prescribed by Section 37.10,
Penal Code, for making or filing an application containing a false statement.
The comptroller, in prescribing the contents of the application form, shall
require that the form permit a claimant who has previously been allowed
appraisal under this subchapter to indicate that previously reported
information has not changed and to supply only the eligibility information not
previously reported.
(d) The form must be filed
before May 1. However, for good cause the chief appraiser may extend the filing
deadline for not more than 60 days.
(e) If a person fails to file a
valid application on time, the land is ineligible for appraisal as provided by
this subchapter for that year. Once an application is filed and appraisal under
this subchapter is allowed, the land is eligible for appraisal under this
subchapter in subsequent years without a new application unless the ownership
of the land changes or its eligibility under this subchapter ends. However, the
chief appraiser if he has good cause to believe the land's eligibility under
this subchapter has ended, may require a person allowed appraisal under this
subchapter in a prior year to file a new application to confirm that the land
is currently eligible under this subchapter by delivering a written notice that
a new application is required, accompanied by the application form, to the
person who filed the application that was previously allowed.
(f) The appraisal office shall
make a sufficient number of printed application forms readily available at no
charge.
(g) Each year the chief
appraiser for each appraisal district shall publicize, in a manner reasonably
designed to notify all residents of the district, the requirements of this
section and the availability of application forms.
(h) A person whose land is
allowed appraisal under this subchapter shall notify the appraisal office in
writing before May 1 after eligibility of the land under this subchapter ends
or after a change in the category of agricultural use. If a person fails to
notify the appraisal office as required by this subsection a penalty is imposed
on the property equal to 10 percent of the difference between the taxes imposed
on the property in each year it is erroneously allowed appraisal under this
subchapter and the taxes that would otherwise have been imposed.
(i) The chief appraiser shall
make an entry in the appraisal records for the property against which the
penalty is imposed indicating liability for the penalty and shall deliver a
written notice of imposition of the penalty to the person who owns the
property. The notice shall include a brief explanation of the procedures for
protesting the imposition of the penalty. The assessor for each taxing unit
that imposed taxes on the property on the basis of appraisal under this
subchapter shall add the amount of the penalty to the unit's tax bill for taxes
on the property against which the penalty is imposed. The penalty shall be
collected at the same time and in the same manner as the taxes on the property
against which the penalty is imposed. The amount of the penalty constitutes a
lien on the property against which the penalty is imposed and accrues penalty
and interest in the same manner as a delinquent tax.
(j) If the chief appraiser
discovers that appraisal under this subchapter has been erroneously allowed in
any one of the five preceding years because of failure of the person whose land
was allowed appraisal under this subchapter to give notice that its eligibility
has ended, he shall add the difference between the appraised value of the land
under this subchapter and the market value of the land to the appraisal roll as
provided by Section 25.21 of this code for other property that escapes
taxation.
Acts 1979, 66th Leg., p. 2259,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S.,
p. 143, ch. 13, Sec. 69, eff. Jan. 1, 1982; Acts 1991, 72nd Leg., 2nd C.S., ch.
6, Sec. 25, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 1031, Sec. 14, eff.
Sept. 1, 1993.
(a) The chief appraiser shall accept and approve or deny an application for
appraisal under this subchapter after the deadline for filing it has passed if
it is filed before approval of the appraisal records by the appraisal review
board.
(b) If appraisal under this
subchapter is approved when the application is filed late, the owner is liable
for a penalty of 10 percent of the difference between the amount of tax imposed
on the property and the amount that would be imposed if the property were taxed
at market value.
(c) The chief appraiser shall
make an entry on the appraisal records indicating the person's liability for
the penalty and shall deliver written notice of imposition of the penalty,
explaining the reason for its imposition, to the person.
(d) The tax assessor for a
taxing unit that taxes land based on an appraisal under this subchapter after a
late application shall add the amount of the penalty to the owner's tax bill,
and the tax collector for the unit shall collect the penalty at the time and in
the manner he collects the tax. The amount of the penalty constitutes a lien
against the property against which the penalty is imposed, as if it were a tax,
and accrues penalty and interest in the same manner as a delinquent tax.
Added by Acts 1981, 67th Leg.,
1st C.S., p. 144, ch. 13, Sec. 70, eff. Jan. 1, 1982.
(a) If the use of land that has been appraised as provided by this subchapter
changes, an additional tax is imposed on the land equal to the difference
between the taxes imposed on the land for each of the five years preceding the
year in which the change of use occurs that the land was appraised as provided
by this subchapter and the tax that would have been imposed had the land been
taxed on the basis of market value in each of those years, plus interest at an
annual rate of seven percent calculated from the dates on which the differences
would have become due. For purposes of this subsection, the chief appraiser may
not consider any period during which land is owned by the state in determining
whether a change in the use of the land has occurred.
(b) A tax lien attaches to the
land on the date the change of use occurs to secure payment of the additional
tax and interest imposed by this section and any penalties incurred. The lien
exists in favor of all taxing units for which the additional tax is imposed.
(c) The additional tax imposed
by this section does not apply to a year for which the tax has already been
imposed.
(d) If the change of use applies
to only part of a parcel that has been appraised as provided by this
subchapter, the additional tax applies only to that part of the parcel and
equals the difference between the taxes imposed on that part of the parcel and
the taxes that would have been imposed had that part been taxed on the basis of
market value.
(e) A determination that a
change in use of the land has occurred is made by the chief appraiser. The
chief appraiser shall deliver a notice of the determination to the owner of the
land as soon as possible after making the determination and shall include in
the notice an explanation of the owner's right to protest the determination. If
the owner does not file a timely protest or if the final determination of the
protest is that the additional taxes are due, the assessor for each taxing unit
shall prepare and deliver a bill for the additional taxes plus interest as soon
as practicable. The taxes and interest are due and become delinquent and incur
penalties and interest as provided by law for ad valorem taxes imposed by the
taxing unit if not paid before the next February 1 that is at least 20 days
after the date the bill is delivered to the owner of the land.
(f) The sanctions provided by
Subsection (a) of this section do not apply if the change of use occurs as a
result of:
(1) a sale for right-of-way;
(2) a condemnation;
(3) a transfer of the property
to the state or a political subdivision of the state to be used for a public
purpose; or
(4) a transfer of the property
from the state, a political subdivision of the state, or a nonprofit corporation
created by a municipality with a population of more than one million under the
Development Corporation Act (Subtitle C1, Title 12, Local Government Code) to
an individual or a business entity for purposes of economic development if the
comptroller determines that the economic development is likely to generate for
deposit in the general revenue fund during the next two fiscal bienniums an
amount of taxes and other revenues that equals or exceeds 20 times the amount
of additional taxes and interest that would have been imposed under Subsection
(a) had the sanctions provided by that subsection applied to the transfer.
(g) If the use of the land
changes to a use that qualifies under Subchapter E of this chapter, the
sanctions provided by Subsection (a) of this section do not apply.
(h) Additional taxes, if any,
for a year in which land was designated for agricultural use as provided by
Subchapter C of this chapter (or Article VIII, Section 1-d, of the
constitution) are determined as provided by that subchapter, and the additional
taxes imposed by this section do not apply for that year.
(i) The use of land does not
change for purposes of Subsection (a) of this section solely because the owner
of the land claims it as part of his residence homestead for purposes of
Section 11.13 of this code.
(j) The sanctions provided by
Subsection (a) do not apply to a change in the use of land if:
(1) the land is located in an
unincorporated area of a county with a population of less than 100,000;
(2) the land does not exceed
five acres;
(3) the land is owned by a
not-for-profit cemetery organization;
(4) the cemetery organization
dedicates the land for a cemetery purpose;
(5) the cemetery organization
has not dedicated more than five acres of land in the county for a cemetery
purpose in the five years preceding the date the cemetery organization
dedicates the land for a cemetery purpose; and
(6) the land is adjacent to a
cemetery that has been in existence for more than 100 years.
(k) In Subsection (j),
"cemetery," "cemetery organization," and "cemetery
purpose" have the meanings assigned those terms by Section 711.001, Health
and Safety Code.
(l) The sanctions provided by
Subsection (a) of this section do not apply to land owned by an organization
that qualifies as a religious organization under Section 11.20(c) of this code
if the organization converts the land to a use for which the land is eligible
for an exemption under Section 11.20 of this code within five years.
(m) For purposes of determining
whether a transfer of land qualifies for the exemption from additional taxes
provided by Subsection (f)(4), on an application of the entity transferring or
proposing to transfer the land or of the individual or entity to which the land
is transferred or proposed to be transferred, the comptroller shall determine
the amount of taxes and other revenues likely to be generated as a result of
the economic development for deposit in the general revenue fund during the
next two fiscal bienniums. If the comptroller determines that the amount of
those revenues is likely to equal or exceed 20 times the amount of additional
taxes and interest that would be imposed under Subsection (a) if the sanctions
provided by that subsection applied to the transfer, the comptroller shall
issue a letter to the applicant stating the comptroller's determination and
shall send a copy of the letter by regular mail to the chief appraiser.
(n) Within one year of the
conclusion of the two fiscal bienniums for which the comptroller issued a
letter as provided under Subsection (m), the board of directors of the
appraisal district, by official board action, may direct the chief appraiser to
request the comptroller to determine if the amount of revenues was equal to or
exceeded 20 times the amount of taxes and interest that would have been imposed
under Subsection (a). The comptroller shall issue a finding as to whether the
amount of revenue met the projected increases. The chief appraiser shall review
the results of the comptroller's finding and shall make a determination as to
whether sanctions under Subsection (a) should be imposed. If the chief
appraiser determines that the sanctions provided by Subsection (a) shall be
imposed, the sanctions shall be based on the date of the transfer of the
property under Subsection (f)(4).
(o) The sanctions provided by
Subsection (a) do not apply to land owned by an organization that qualifies as
a charitable organization under Section 11.18(c), is organized exclusively to
perform religious or charitable purposes, and engages in performing the
charitable functions described by Section 11.18(d)(19), if the organization
converts the land to a use for which the land is eligible for an exemption
under Section 11.18(d)(19) within five years.
Acts 1979, 66th Leg., p. 2259,
ch. 841, Sec. 1, eff. Jan. 1, 1982. Amended by Acts 1981, 67th Leg., 1st C.S.,
p. 145, ch. 13, Sec. 71, eff. Jan. 1, 1982; Acts 1983, 68th Leg., p. 4147, ch.
652, Sec. 2, eff. June 19, 1983; Acts 1983, 68th Leg., p. 4824, ch. 851, Sec.
12, eff. Aug. 29, 1983; Acts 1989, 71st Leg., ch. 796, Sec. 20, eff. Sept. 1,
1989; Acts 1995, 74th Leg., ch. 471, Sec. 2, eff. June 12, 1995; Acts 1995,
74th Leg., ch. 811, Sec. 1, eff. Aug. 28, 1995; Acts 1997, 75th Leg., ch. 165,
Sec. 31.01(74), eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 345, Sec. 5, eff.
Sept. 1, 1997; Acts 1997, 75th Leg., ch. 351, Sec. 1, eff. Sept. 1, 1997; Acts
2003, 78th Leg., ch. 288, Sec. 1.08, eff. June 18, 2003; Acts 2003, 78th Leg.,
ch. 1176, Sec. 1, eff. June 20, 2003.
Amended by:
Acts 2005, 79th Leg., Ch. <a
target="new"
href="http://www.legis.state.tx.us/tlodocs/79R/billtext/html/HB02018F.HTM">728</a>,
Sec. 23.001(81), eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
<a target="new" href="http://www.legis.state.tx.us/tlodocs/80R/billtext/html/HB02278F.HTM">885</a>,
Sec. 3.69, eff. April 1, 2009.
Land is not eligible for appraisal as provided by this subchapter if:
(1) the land is located inside
the corporate limits of an incorporated city or town, unless:
(A) the city or town is not
providing the land with governmental and proprietary services substantially
equivalent in standard and scope to those services it provides in other parts
of the city or town with similar topography, land utilization, and population
density; or
(B) the land has been devoted
principally to agricultural use continuously for the preceding five years;
(2) the land is owned by an
individual who is a nonresident alien or by a foreign government if that
individual or government is required by federal law or by rule adopted pursuant
to federal law to register his ownership or acquisition of that property; or
(3) the land is owned by a
corporation, partnership, trust, or other legal entity if the entity is
required by federal law or by rule adopted pursuant to federal law to register
its ownership or acquisition of that land and a nonresident alien or a foreign
government or any combination of nonresident aliens and foreign governments own
a majority interest in the entity.
Acts 1979, 66th Leg., p. 2260,
ch. 841, Sec. 1, eff. Jan. 1, 1982.
(a) The chief appraiser shall determine separately each applicant's right to
have his land appraised under this subchapter. After considering the
application and all relevant information, the chief appraiser shall, as the law
and facts warrant:
(1) approve the application and
allow appraisal under this subchapter;
(2) disapprove the application
and request additional information from the applicant in support of the claim;
or
(3) deny the application.
(b) If the chief appraiser
requests additional information from an applicant, the applicant must furnish
it within 30 days after the date of the request or the application is denied.
However, for good cause shown the chief appraiser may extend the deadline for
furnishing the information by written order for a single period not to exceed
15 days.
(c) The chief appraiser shall
determine the validity of each application for appraisal under this subchapter
filed with him before he submits the appraisal records for review and
determination of protests as provided by Chapter 41 of this code.
(d) If the chief appraiser
denies an application, he shall deliver a written notice of the denial to the
applicant within five days after the date he makes the determination. He shall
include with the notice a brief explanation of the procedures for protesting
his action and a full explanation of the reasons for denial of the application.
Added by Acts 1981, 67th Leg.,
1st C.S., p. 145, ch. 13, Sec. 72, eff. Jan. 1, 1982.