HBA-RBT H.B. 1360 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1360
By: Hupp
Ways & Means
3/9/1999
Introduced



BACKGROUND AND PURPOSE 

Under current law, to qualify for an agricultural appraisal, land must be
devoted to agricultural production for at least five of the past seven
years. Land that qualifies for an agricultural appraisal incurs an
additional tax penalty (rollback tax) if the land's use is changed to
nonagricultural use. The penalty is equal to the difference between the
taxes imposed on the land for each of the five years before the year in
which the change of use occurs and the taxes that would have been imposed
on the land if the land had been taxed at market value, plus interest. 

H.B. 1360 reduces the qualification period for agricultural appraisal from
five of the past seven years to one year and changes the rollback tax to
three times the difference between the tax imposed on the land in the
preceding year and the tax that would have been imposed based on the market
value of the land. The purpose of the reduced qualification period is to
encourage more people to enter the farming and ranching business, while
maintaining a rollback tax to discourage land from being removed from
agricultural use. 


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 23.51(1), Tax Code, to modify the definition of
"qualified openspace land" to be land that was used principally for
agricultural use or production of timber or forest products for the
preceding year, rather than five of the preceding seven years. 

SECTION 2.  Amends Section 23.55(a), Tax Code, to set forth the additional
tax imposed when a change occurs in the use of land that has been appraised
as provided under this subchapter.  Sets forth the computation for the
amount of the additional tax.  Makes conforming and nonsubstantive changes. 

SECTION 3.  Makes application of Section 1 of this Act prospective to
January 1, 2000. 
            Effective date for Section 2 of this Act: September 1, 1999.
            Makes application of Section 2 of this Act prospective.

SECTION 4.  Emergency clause.