82R5991 SMH-D

By: Miles H.B. No. 2998

A BILL TO BE ENTITLED

AN ACT

relating to ad valorem tax relief for urban farms and green roofs.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Title 3, Agriculture Code, is amended by adding Chapter 50E to read as follows:

CHAPTER 50E. URBAN FARMS AND GREEN ROOFS

Sec. 50E.001. DEFINITIONS. In this chapter:

(1) "Community garden" means land gardened by a cooperative group of people residing in a neighborhood or community for the purpose of providing fresh produce for the benefit of the residents of the neighborhood or community.

(2) "Green roof" means a roof of a structure that includes a growth medium consisting of two to four inches of soil, drainage material, and a vegetation layer two to four inches high consisting of drought-resistant and hardy plant species that is designed to provide maximum ground cover, water retention, erosion resistance, and respirative transpiration of moisture.

(3) "Urban farm" means land used to cultivate, process, and distribute food in or near an urban area. The term includes a food plot in a community garden, on an inner-city lot, or on the property of a school, a fish farm, a municipal composting facility, an apiary, a garden that provides food for local restaurants, or an orchard in the yard of a residence.

Sec. 50E.002. STANDARDS FOR URBAN FARMS AND GREEN ROOFS. (a) The department shall develop standards for determining whether:

(1) an urban farm qualifies for ad valorem tax appraisal as qualified open-space land under Subchapter D, Chapter 23, Tax Code;

(2) an urban farm or green roof qualifies for an ad valorem tax credit under Section 31.038, Tax Code; or

(3) an urban farm or green roof qualifies for an abatement of ad valorem taxes under Chapter 312, Tax Code.

(b) The comptroller by rule shall adopt the standards developed by the department and distribute those rules to each appraisal district.

(c) The standards developed under Subsection (a) in connection with a green roof must include:

(1) standards for the design of a green roof, including standards regarding the plant material that may be used based on height, growth rate, drought tolerance, root systems, irrigation or nutritional requirements, maintenance requirements, production of seeds likely to invade nearby landscapes, generation of allergens, necessity for remedial air filtration, and other factors considered relevant by the department;

(2) procedures and criteria for inspection and certification of the plans for a green roof before the roof is installed;

(3) procedures and criteria for inspection and certification of a green roof after the roof is installed, including the testing of runoff water for environmentally unacceptable chemical fertilizers; and

(4) standards for environmentally acceptable chemical fertilizers to be used in the maintenance of a green roof.

Sec. 50E.003. EDUCATION PROGRAM. The department shall implement a program to inform:

(1) the public about the department's standards regarding urban farms and green roofs; and

(2) commercial installers about the department's standards regarding green roofs.

Sec. 50E.004. CERTIFICATION OF URBAN FARMS AND GREEN ROOFS. (a) The department shall implement a program to certify urban farms and green roofs as meeting the standards adopted under Section 50E.002.

(b) The department may authorize a municipality or county to issue a certification under Subsection (a) if the municipality or county notifies the department that it wants to issue the certifications. The department may impose conditions on the authorization as determined by the department.

SECTION 2. Section 23.19(g), Tax Code, is amended to read as follows:

(g) A tax bill or a separate statement accompanying the tax bill to a cooperative housing corporation for which interests of stockholders are separately appraised under this section must state, in addition to the information required by Section 31.01, the appraised value and taxable value of each interest separately appraised. Each exemption claimed as provided by this title by a person entitled to the exemption shall also be deducted from the total appraised value of the property of the corporation. Each credit for the costs of constructing or installing a green roof claimed as provided by Section 31.038 by a person entitled to the credit shall be deducted from the taxes imposed by a taxing unit on the property of the corporation. The total tax imposed by a school district, county, municipality, or junior college district shall be reduced by any amount that represents an increase in taxes attributable to separately appraised interests of the real property and improvements that are subject to the limitation of taxes prescribed by Section 11.26 or 11.261. The corporation shall apportion among its stockholders liability for reimbursing the corporation for property taxes according to the relative taxable values of their interests.

SECTION 3. Section 23.51(2), Tax Code, is amended to read as follows:

(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. The term also includes the use of land as an urban farm if the urban farm is certified under Section 50E.004, Agriculture Code, as meeting the standards for urban farms adopted by the comptroller under Section 50E.002 of that code.

SECTION 4. Chapter 31, Tax Code, is amended by adding Section 31.038 to read as follows:

Sec. 31.038. TAX CREDIT FOR URBAN FARM OR GREEN ROOF CONSTRUCTION OR INSTALLATION COSTS. (a) In this section, "community garden," "green roof," and "urban farm" have the meanings assigned by Section 50E.001, Agriculture Code.

(b) This section applies only to property located in:

(1) the corporate limits or extraterritorial jurisdiction of a municipality with a population of at least one million; and

(2) an area designated as a reinvestment zone under Chapter 312.

(c) A person who develops the person's property as an urban farm is entitled to a credit against the taxes imposed on the property by each taxing unit that taxes the property if the urban farm is certified under Section 50E.004, Agriculture Code, as meeting the standards for urban farms adopted by the comptroller under Section 50E.002 of that code. The amount of the credit is equal to the amount computed by multiplying the greater of 55 percent of the costs of developing the property as an urban farm or $8,000 by a fraction the numerator of which is the amount of taxes imposed on the property by the taxing unit and the denominator of which is the total amount of taxes imposed on the property by all of the taxing units that tax the property.

(d) A person who constructs or installs a green roof on the person's residence homestead is entitled to a credit against the taxes imposed on the property by each taxing unit that taxes the property if the green roof is certified under Section 50E.004, Agriculture Code, as meeting the standards for green roofs adopted by the comptroller under Section 50E.002 of that code. The amount of the credit is equal to the amount computed by multiplying the greater of 55 percent of the costs of constructing or installing the green roof or $5,000 by a fraction the numerator of which is the amount of taxes imposed on the property by the taxing unit and the denominator of which is the total amount of taxes imposed on the property by all of the taxing units that tax the property.

(e) Costs for which a credit may be given under Subsection (d) include costs for:

(1) architectural and engineering services, including services related to the development of plans directly related to the construction or installation of the green roof;

(2) materials, including irrigation systems; and

(3) labor related to on-site preparation, assembly, and installation of the green roof.

(f) Costs for which a credit may be given under Subsection (c) or (d) may not include:

(1) interest or other finance charges; and

(2) costs that were paid from any federal, state, or local grant received by the property owner that was not considered to be income of the property owner for federal income tax purposes.

(g) If a person who qualifies for a credit as provided by this section is not the sole owner of the property to which the credit applies, the credit to which the person is entitled is reduced in proportion to the share of the costs incurred under Subsection (c) or (d) in connection with the property that were paid by the person.

(h) Except as provided by Subsection (i), a person may receive a credit under this section only in the first tax year after the year in which the person:

(1) developed the person's property as an urban farm; or

(2) constructed or installed a green roof on the person's residence homestead.

(i) If the amount of the credit to which a person is entitled under this section in any tax year exceeds the amount of tax imposed on the property in that tax year, the excess amount may be carried forward and credited against the taxes imposed in the following tax year, except that the credit may not be carried forward for more than five tax years.

(j) To receive a credit under this section, a person must file an application with the chief appraiser of the appraisal district in which the property is located. The application must include:

(1) the costs incurred by the person in:

(A) developing the person's property as an urban farm; or

(B) constructing or installing a green roof on the person's residence homestead; and

(2) a certification under Section 50E.004, Agriculture Code, that:

(A) the urban farm meets the standards for urban farms adopted by the comptroller under Section 50E.002, Agriculture Code; or

(B) the green roof meets the standards for green roofs adopted by the comptroller under Section 50E.002, Agriculture Code.

(k) The chief appraiser shall forward a copy of the application to the assessor for each taxing unit that taxes the property. The assessors for the taxing units shall consult with one another as necessary to compute the amount of the credit to be granted by each taxing unit.

(l) A credit provided by this section, once allowed, need not be claimed in subsequent years and applies to the property regardless of any subsequent change in ownership of the property.

SECTION 5. Section 312.204, Tax Code, is amended by adding Subsection (i) to read as follows:

(i) The governing body of a municipality eligible to enter into tax abatement agreements under Section 312.002 may agree in writing with the owner of taxable real property that is located in a reinvestment zone to exempt from taxation a portion of the value of the real property as provided by this section on the condition that the owner of the property:

(1) develop the person's property as an urban farm that is certified under Section 50E.004, Agriculture Code, as meeting the standards for urban farms adopted by the comptroller under Section 50E.002 of that code; or

(2) if the property is a residence homestead, install or construct a green roof on the property that is certified under Section 50E.004, Agriculture Code, as meeting the standards for green roofs adopted by the comptroller under Section 50E.002 of that code.

SECTION 6. This Act applies only to ad valorem taxes imposed for a tax year beginning on or after the effective date of this Act.

SECTION 7. This Act takes effect January 1, 2012.