H.B. 1821 78(R)    BILL ANALYSIS


H.B. 1821
By: Kuempel
Local Government Ways and Means
Committee Report (Unamended)



BACKGROUND AND PURPOSE 
Under current law, Texas requires a buyer of agricultural land, which has
lost its qualification as open-space land for tax purposes, to re-apply
for and create a new 5-year history before its value as open-space land or
agricultural land can be considered. If land loses its qualification as
open-space land, under the Tax Code, it is subject to a rollback tax
penalty because of the change in usage of the land. This legislation would
allow new owners of previously qualified land that had lost its
qualification as open-space land in the last 10 years the opportunity to
register with the county tax appraiser their intent to convert the land
back to agricultural use as open-space land. The owner would receive an
immediate tax rate valuation change to open-space land. The owner would
then have three years, to re-establish the land to be in total compliance
with the current Tax Code degree of intensity standards.  If, at the end
of three years, the landowner has not met the minimum intensity
requirements, the owner would be responsible for paying rollback taxes
along with interest for the three years that he had received the lower
open-space land valuation for tax purposes. 


RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency, or
institution. 

ANALYSIS

House Bill 1821 adds Section 23.515, Tax Code, to allow the buyer of
open-space land, upon purchasing the land, to register with the county tax
appraiser their intent to convert the land back to agricultural use and
immediately receive a tax rate valuation change to agricultural use,
subject to certain limitations. 

The owner must file a notice with the chief appraiser before May 1st that
states the owner intends to devote the land to agricultural use.  The land
must not have been appraised as open-space land or agricultural land at
the time the owner acquired the land, the land must have been appraised as
openspace or agricultural land by a previous owner in any of the ten years
preceding the year the owner submits notice to the chief appraiser, and
the land is not ineligible for appraisal as open space land. 

HB 1821 also specifies the form of notice to the appraiser and the
responsibilities of the appraiser prior to and after the land being
devoted principally to agricultural use.  The bill also places a
limitation on the time frame for which land must be devoted to
agricultural use after notice is filed before a rollback tax is imposed. 

Section 23.515, Tax Code, applies only to the appraisal of land for ad
valorem tax purposes for a tax year beginning on or after the effective
date of this Act. 

EFFECTIVE DATE

The Act takes effect January 1, 2004, if the constitutional amendment is
approved by the voters. Otherwise, the Act has no effect.